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What changed in Sila Realty Trust, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Sila Realty Trust, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+414 added−323 removedSource: 10-K (2025-03-03) vs 10-K (2024-03-06)

Top changes in Sila Realty Trust, Inc.'s 2024 10-K

414 paragraphs added · 323 removed · 204 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

22 edited+25 added−18 removed42 unchanged
Biggest changeThe following table shows the tenant that accounted for 10% or more of our rental revenue for the year ended December 31, 2023: Tenant Total Number of Leases Leased Sq Ft 2023 Rental Revenue (in thousands) Percentage of 2023 Rental Revenue Post Acute Medical, LLC, and its affiliates (1) 15 708,817 $ 27,342 14.5 % (1) The leases are with tenants under the common control of Post Acute Medical, LLC and its affiliates and have lease expiration dates between 2030 and 2042. 5 Table of Contents The following table shows the geographic diversification of our real estate properties that accounted for 10% or more of our rental revenue for the year ended December 31, 2023: Location Total Number of Leases Leased Sq Ft 2023 Rental Revenue (in thousands) Percentage of 2023 Rental Revenue Houston-Pasadena-The Woodlands, TX 5 490,742 $ 19,217 10.2 % Compliance with Governmental Regulations Our real estate properties are subject to various federal, state and local regulatory laws and requirements, including, but not limited to, zoning regulations, building codes and land use laws and building, accessibility, occupancy and other permit requirements.
Biggest changeThe following table shows the tenant that accounted for 10% or more of our rental revenue for the year ended December 31, 2024: Tenant Total Number of Leases Leased Sq Ft 2024 Rental Revenue (in thousands) Percentage of 2024 Rental Revenue Post Acute Medical, LLC, and its affiliates (1) 15 708,817 $ 27,754 14.9 % (1) The leases are with tenants under the common control of Post Acute Medical, LLC and its affiliates and have lease expiration dates on November 30, 2044.
We obtain Phase I Environmental Assessment Reports, and as needed, further environmental due diligence, including but not limited to Phase II Environmental Assessment Reports, upon each property acquisition, and, if determined necessary, during our period of ownership, to ensure that the properties that we acquire and own are free of environmental contamination and hazardous substances.
We obtain Phase I Environmental Assessment Reports, and as needed, conduct further environmental due diligence, including but not limited to Phase II Environmental Assessment Reports, upon each property acquisition, and, if determined necessary, during our period of ownership, to ensure that the properties that we acquire and own are free of environmental contamination and hazardous substances.
Except as the context otherwise requires, “we,” “our,” “us,” and the “Company” refer to Sila Realty Trust, Inc., our Operating Partnership and all wholly-owned subsidiaries. We are an internally managed company primarily focused on investing in high quality healthcare assets across the continuum of care, which we believe typically generate predictable, durable and growing income streams.
Except as the context otherwise requires, “we,” “our,” “us,” and the “Company” refer to Sila Realty Trust, Inc., our Operating Partnership and all wholly-owned subsidiaries. We are an internally managed company primarily focused on investing in high quality healthcare facilities across the continuum of care, which we believe typically generate predictable, durable and growing income streams.
At the time we determine to dispose of our properties, we are typically in competition with sellers of similar properties to locate suitable purchasers for our properties. Concentration of Credit Risk and Significant Tenants As of December 31, 2023, we had cash on deposit in certain financial institutions that had deposits in excess of current federally insured levels.
At the time we determine to dispose of our properties, we are typically in competition with sellers of similar properties to locate suitable purchasers for our properties. Concentration of Credit Risk and Significant Tenants As of December 31, 2024, we had cash on deposit in certain financial institutions that had deposits in excess of current federally insured levels.
Competition As we purchase properties for our portfolio, we are in competition with other potential buyers (some of whom have more cash, available liquidity, and/or offer competitive advantages versus us in the acquisition of properties) for the same properties and may have to pay more to purchase the property than if there were no other potential acquirers, or we may have to locate another property that meets our investment criteria.
Competition As we purchase properties for our portfolio, we are in competition with other potential buyers (some of whom have more cash, available liquidity, and/or offer competitive advantages versus us in the acquisition of properties) for the same properties and may have to pay more to purchase the property than if there were no other potential acquirers, or we may have to locate 5 Table of Contents another property that meets our investment criteria.
The determination of whether an asset will be sold or otherwise disposed of is made after consideration of relevant factors, including prevailing economic conditions, specific real 4 Table of Contents estate market conditions, tax implications for our stockholders, and other factors.
The determination of whether an asset will be sold or otherwise disposed of is made after consideration of relevant factors, including prevailing economic conditions, specific real estate market conditions, tax implications for our stockholders, and other factors.
Investment Objectives and Policies Our primary investment objectives at this time are to: • acquire high quality healthcare properties leased to tenants along the continuum of care, capitalizing on critical and structural economic growth drivers; • pay regular cash distributions to stockholders; • preserve, protect and return capital contributions to stockholders; • realize appreciated growth in the value of our investments upon the sale of such investments in whole or in part; and • be prudent, patient and deliberate with respect to the purchase and sale of our investments considering current and projected real estate markets.
Investment Objectives and Policies Our primary investment objectives at this time are to: • acquire high quality healthcare properties leased to tenants along the continuum of care; • pay regular cash distributions to stockholders; • preserve, protect and return capital contributions to stockholders; • realize appreciated growth in the value of our investments upon the sale of such investments in whole or in part; and • be prudent, patient and deliberate with respect to the purchase and sale of our investments considering current and projected real estate and financial markets.
Our core values are essential to the Company's culture. These values are critical to the success of the Company and are aligned with the Company's mission and vision statements. They define expectations for how all employees collaborate, communicate, interact and perform their roles within the Company.
These values are critical to the success of the Company and are aligned with the Company's mission and vision statements. They define expectations for how all employees collaborate, communicate, interact and perform their roles within the Company.
Noncompliance could result in the imposition of governmental fines or an award of damages to private litigants. While we believe that we are currently in material compliance with these regulatory requirements, the requirements may change or new requirements may be imposed that could require significant unanticipated expenditures by us. Significant regulatory requirements include the laws and regulations described below.
While we believe that we are currently in material compliance with these regulatory requirements, the requirements may change or new requirements may be imposed that could require significant unanticipated expenditures by us. Significant regulatory requirements include the laws and regulations described below.
Acquisition Structure We have and expect to continue to acquire fee interests in properties (a fee interest is the absolute, legal possession and ownership of land, property, or rights), although we may utilize other methods of acquiring a property if we deem them to be advantageous.
We may purchase the common stock, preferred stock, debt, or other securities of these entities or options to acquire such securities. 4 Table of Contents Acquisition Structure We have and expect to continue to acquire fee interests in properties (a fee interest is the absolute, legal possession and ownership of land, property, or rights), although we may utilize, and we have utilized, other methods of acquiring a property, such as a leasehold interest in the land, if we deem them to be advantageous.
This determination is made based upon a variety of factors, including the available risk-adjusted returns for such properties when compared with other available properties, the effect such properties would have on the diversification of our portfolio, and our investment objectives of realizing both current income and capital appreciation upon the sale of such properties.
This determination is made based upon a variety of factors, including the available risk-adjusted returns for such properties when compared with other available properties, the effect such properties would have on the diversification of our portfolio, and our investment objectives of realizing both current income and capital appreciation upon the sale of such properties. 3 Table of Contents We endeavor to achieve a well-balanced portfolio of real estate investments that is diversified by tenancy, geographic location, age and lease maturities.
With this in mind, we provide multiple channels to speak up, ask for guidance, and report concerns. We continue to prioritize having "The Right People, In The Right Places, Doing The Right Things." Core Values: We believe that our employees are aligned around core values that inspire our behavior as individuals and as an organization.
We continue to prioritize having "The Right People, In The Right Places, Doing The Right Things." Core Values: We believe that our employees are aligned around core values that inspire our behavior as individuals and as an organization. Our core values are essential to the Company's culture.
In addition, we make certain materials that are electronically filed with the SEC available at www.silarealtytrust.com as soon as reasonably practicable.
In addition, we make certain materials that are electronically filed with, or furnished to, the SEC available at www.investors.silarealtytrust.com as soon as reasonably practicable. We routinely post important information on our website at www.silarealtytrust.com in the “Investors” section.
We monitor tenant credit by: (1) reviewing the credit ratings of tenants (or their parent companies) that are rated by nationally recognized rating agencies; (2) reviewing financial statements that are publicly available or that are required to be delivered to us under the applicable lease; (3) monitoring industry reports and other available information regarding our tenants and their underlying businesses; (4) monitoring the timeliness of rent collections; and (5) conducting periodic inspections of our properties to ascertain proper maintenance, repair and upkeep. 3 Table of Contents Investment Decisions In evaluating investments in properties, we consider various factors, including, to the extent such information is available with respect to such property, the following: • proposed purchase price, terms and conditions; • physical condition, age, and environmental reports; • location, visibility and access; • historical financial performance; • tenants in place and tenant creditworthiness; • lease terms, including rent, rent increases, length of lease term, specific tenant and landlord responsibilities, renewal, expansion, termination, purchase options, exclusive and permitted uses provisions, assignment and sublease provisions, and co-tenancy requirements; • local market economic conditions, demographics and population growth patterns; • neighboring properties; and • potential for new property construction in the area.
Investment Decisions In evaluating investments in properties, we consider various factors, including, to the extent such information is available with respect to such property, the following: • proposed purchase price, terms and conditions; • physical condition, age, and environmental reports; • location, visibility and access; • historical financial performance; • tenants in place and tenant creditworthiness; • lease terms, including rent, rent increases, length of lease term, specific tenant and landlord responsibilities, renewal, expansion, termination, purchase options, exclusive and permitted uses provisions, assignment and sublease provisions, and co-tenancy requirements; • local market economic conditions, demographics and population growth patterns; • neighboring properties; and • potential for new property construction in the area.
Available Information We electronically file our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports with the SEC.
Available Information We electronically file our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports with the SEC. Copies of our filings with the SEC may be obtained from the SEC’s website, http://www.sec.gov. Access to these filings is free of charge.
Creditworthy Tenants We expect the tenants and/or sponsors of the tenants of our healthcare properties to be creditworthy national or regional companies generally with high net worth and high operating income. A tenant is considered creditworthy if it has a financial profile that we believe meets our criteria.
We seek to acquire properties primarily in the high-growth healthcare sector with tenants that are diversified among national, regional and local entities. Creditworthy Tenants We expect the tenants and/or sponsors of the tenants of our healthcare properties to be creditworthy national, regional or local companies generally with high net worth and high operating income.
Human Capital Resources As of December 31, 2023, we had 48 employees. None of our employees are represented by a labor union or covered by a collective bargaining agreement.
They describe for each employee the expectation of a "HI ACT" and that is with humility, with integrity, with accountability, with transparent and honest communication and by embracing teamwork. Human Capital Resources As of December 31, 2024, we had 49 employees. None of our employees are represented by a labor union or covered by a collective bargaining agreement.
We may also make other real estate-related investments, which may include equity or debt interests in other real estate entities. We formerly invested in data center properties. During the second quarter of 2021, our board of directors, or the Board, made a determination to sell our data center properties.
We may also make other real estate-related investments, which may include equity or debt interests in other real estate entities.
In connection with ownership and operation of real estate, we may be potentially liable for costs and damages related to environmental matters. Corporate Responsibility We are committed to maintaining healthy, prosperous, and sustainable communities through thoughtful stewardship of the environment and conscientious management of our own corporate culture.
In connection with ownership and operation of real estate, we may be potentially liable for costs and damages related to environmental matters. Corporate Responsibility We are committed to practicing strong corporate governance, being socially conscious, and environmentally aware. In early 2022, the Board established the Corporate Responsibility Committee, led by members of our management team and other senior managers.
The ESG Steering Committee meets at least quarterly to discuss our strategy, initiatives, and progress, in support of our on-going commitment to corporate governance, social responsibility, environmental matters, sustainability, health and safety. Environmental In light of climate concerns and employees' continuing desire for workplace flexibility, we maintain a hybrid workplace model.
The Corporate Responsibility Committee meets at least annually to discuss our strategy, initiatives, and progress, in support of our on-going commitment to corporate governance, social responsibility, environmental matters, sustainability, health and safety. 6 Table of Contents Environmental, Social and Governance We lease Class A Office space in a tenant focused experiential building that intends to deliver a restorative professional environment that cultivates productivity, collaboration, betterment and balance.
Ethical behavior is an important cornerstone of our Company’s continued success and each of us has an obligation to report any accounting irregularity, theft, discrimination, harassment or other violation of the law. We are committed to creating an open and accountable workplace where employees feel empowered to speak up and raise issues.
Corporate Culture: Our strong tone at the top begins with the Board, which has demonstrated its focus on advancing openness, honesty, fairness and integrity within the Company. Ethical behavior is an important cornerstone of our continued success and each of us has an obligation to report any accounting irregularity, theft, discrimination, harassment or other violation of the law.
They describe for each employee the expectation of a "HI ACT" and that is with humility, with integrity, with accountability, with transparent and honest communication and by embracing teamwork. Social Impact and Community: Our mission is to engage, inspire, and empower our employees to make a positive impact on our community where we work and live.
We also carry environmental liability insurance on our properties, which provides coverage for pollution liability, third-party bodily injury and property damage claims. Social Impact and Community: Our mission is to engage, inspire, and empower our employees to make a positive impact on our community where we work and live.
Removed
On May 19, 2021, we and certain of our wholly-owned subsidiaries entered into a purchase and sale agreement, or the PSA, for the sale of up to 29 data center properties owned by us, which constituted the entirety of our data center segment, or the Data Center Sale.
Added
New York Stock Exchange Listing and Reverse Stock Split On June 13, 2024, our common stock, par value $0.01 per share, or our Common Stock, was listed and began trading on the New York Stock Exchange, or the NYSE, under the ticker symbol "SILA", or the Listing.
Removed
On July 22, 2021, we completed the sale of all 29 of the data center properties for an aggregate sale price of $1,320,000,000, and generated net proceeds of approximately $1,295,367,000. Concurrently, the Board declared a special cash distribution of $1.75 per share of Class A, Class I, Class T and Class T2 shares of common stock.
Added
Upon the Listing, all outstanding shares of Class I Common Stock and Class T Common Stock were automatically converted into shares of Class A Common Stock on a one-for-one basis and authorized but unissued shares of Class I Common Stock, Class T Common Stock and Class T2 Common Stock were reclassified into additional shares of Class A Common Stock.
Removed
The special cash distribution was funded with the proceeds from the sale of the data center properties. The special cash distribution was paid on July 30, 2021 to stockholders of record at the close of business on July 26, 2021, in the aggregate amount of approximately $392,685,000.
Added
Class A Common Stock was then immediately renamed “Common Stock” and is the sole class of stock traded on the NYSE.
Removed
The decision of the Board to sell the data center properties, as well as the execution of the PSA, represented a strategic shift that had a major effect on our results and operations for the periods presented.
Added
On April 8, 2024, in anticipation of the Listing, we amended our charter to effect a one-for-four reverse stock split, or the Reverse Stock Split, of each issued and outstanding share of each class of our Common Stock, effective May 1, 2024, and we also amended our charter to decrease the par value of each issued and outstanding share of our Common Stock from $0.04 par value per share to $0.01 par value per share immediately after the Reverse Stock Split.
Removed
The operations of the data center segment have been classified as income from discontinued operations on the consolidated statements of comprehensive income for the year ended December 31, 2021.
Added
In addition, equitable adjustments were made to the maximum number of shares of our Common Stock that may be issued pursuant to our Amended and Restated 2014 Restricted Share Plan, or the A&R Incentive Plan, to reflect the Reverse Stock Split.
Removed
We raised the equity capital for our real estate investments through two public offerings, or our Offerings, from May 2014 through November 2018, and we have offered shares through our distribution reinvestment plan, or the DRIP, pursuant to three Registration Statements on Form S-3, together the DRIP Offerings and each a DRIP Offering, since November 2017.
Added
The number of shares of our Common Stock subject to outstanding awards under the A&R Incentive Plan were also equitably adjusted to reflect the Reverse Stock Split. The Reverse Stock Split affected all record holders of our Common Stock uniformly and did not affect any record holder’s percentage ownership interest.
Removed
As of December 31, 2023, we owned 131 real estate healthcare properties and two undeveloped land parcels. We have historically established, and intend to continue to establish, an estimated per share net asset value, or Estimated Per Share NAV, on at least an annual basis.
Added
The Reverse Stock Split did not affect the number of our authorized shares of Common Stock. All references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted as though the Reverse Stock Split had been effectuated prior to all periods presented.
Removed
Each Estimated Per Share NAV was determined by the Board, after consultation with an independent third-party valuation firm. The Estimated Per Share NAV is not subject to audit by our independent registered public accounting firm.
Added
"Dutch Auction" Tender Offer On June 13, 2024, in conjunction with the Listing, we commenced a modified "Dutch Auction" tender offer, or the Tender Offer, to purchase shares of our Common Stock for cash at a price per share of not greater than $24.00 nor less than $22.60, net to the seller in cash, less any applicable withholding taxes and without interest, for a maximum aggregate purchase price of no more than $50,000,000.
Removed
The Estimated Per Share NAV was calculated for purposes of assisting broker-dealers participating in public offerings in meeting their customer account statement reporting obligations under the National Association of Securities Dealers Conduct Rule 2340.
Added
The Tender Offer expired on July 19, 2024.
Removed
The following table outlines the established Estimated Per Share NAV as determined by the Board for the last three years as of each valuation date presented below: Valuation Date Effective Date Estimated Per Share NAV May 31, 2021 July 26, 2021 $9.95 (1) May 31, 2021 July 26, 2021 $8.20 (1) June 30, 2022 August 25, 2022 $8.22 March 31, 2023 May 11, 2023 $8.13 October 31, 2023 December 18, 2023 $7.48 (1) On July 22, 2021, we announced the Estimated Per Share NAV that the Board, at the recommendation of our audit committee, or the Audit Committee, approved on July 20, 2021, which was calculated as of May 31, 2021, of $9.95.
Added
As a result of the Tender Offer, we accepted for purchase 2,212,389 shares of Common Stock (which represented approximately 3.9% of the total number of shares of Common Stock outstanding as of July 19, 2024) at a purchase price of $22.60 per share, for an aggregate purchase price of approximately $50,000,000, excluding all related costs and fees.
Removed
Upon the declaration of a special cash distribution of $1.75 per share to stockholders of record on July 26, 2021, the new Estimated Per Share NAV was $8.20.
Added
We incurred $2,093,000 of costs and fees related to the Tender Offer which are recorded as a reduction in equity on the accompanying consolidated financial statements. We funded the Tender Offer and related costs and fees with our available cash. As of December 31, 2024, we owned 135 real estate healthcare properties and two undeveloped land parcels.
Removed
Key Developments During 2023 • During the year ended December 31, 2023, we purchased two operating healthcare properties, comprising approximately 130,000 rentable square feet for an aggregate purchase price of approximately $69,822,000. 2 Table of Contents • During the year ended December 31, 2023, we sold three healthcare facilities for an aggregate sale price of $271,107,000 and generated net proceeds of $270,306,000.
Added
Key Developments During 2024 • On June 13, 2024, our Common Stock was listed and began trading on the NYSE. • On July 29, 2024, we concluded the Tender Offer, for an aggregate purchase price of approximately $50,000,000, excluding all related costs and fees.
Removed
We endeavor to achieve a well-balanced portfolio of real estate investments that is diversified by tenancy, geographic location, age and lease maturities. We seek to acquire properties primarily in the high-growth healthcare sector and tenants of the properties that are diversified between national, regional and local entities.
Added
We incurred $2,093,000 of costs and fees related to the Tender Offer which are recorded as a reduction in equity on the accompanying consolidated financial statements. 2 Table of Contents • The board of directors, or the Board, approved the termination of our distribution reinvestment plan, or the DRIP, effective May 1, 2024, and approved the termination of our share repurchase program effective upon the Listing. • We purchased eight operating healthcare properties, comprising approximately 307,000 rentable square feet for an aggregate purchase price of approximately $164,053,000. • We sold four healthcare facilities for an aggregate sale price of $18,700,000 and generated net proceeds of $17,705,000. • We entered into two mezzanine loans for the development of an inpatient rehabilitation facility and a behavioral healthcare facility in Lynchburg, Virginia, or the Mezzanine Loans.
Removed
We may purchase the common stock, preferred stock, debt, or other securities of these entities or options to acquire such securities.
Added
The Mezzanine Loans have total loan amounts of $12,543,000 and $5,000,000, respectively, and a maturity date of November 5, 2029. Funding is expected to commence in 2025. • We entered into 15 amended lease agreements, effective December 1, 2024, with certain subsidiaries of Post Acute Medical, LLC, or the PAM Amended Lease Agreements, related to 15 properties.
Removed
In early 2022, the Board established the Environmental, Social and Governance Steering Committee, or the ESG Steering Committee, led by members of our management team and other senior managers.
Added
The PAM Amended Lease Agreements extend the term of each lease to a 20-year remaining lease term, with each maturing on November 30, 2044, and no changes to the base rental rate. • We entered into a senior unsecured amended and restated term loan agreement, or the 2027 Term Loan Agreement, with Truist Bank, as Administrative Agent for the lenders, for aggregate commitments of $250,000,000, which may be increased, subject to lender approval, to an aggregate amount not to exceed $500,000,000.
Removed
We lease Class A Office space in a recently constructed building that intends to deliver a restorative professional environment that cultivates productivity, collaboration, engagement, and balance.
Added
The maturity date for the 2027 Term Loan is March 20, 2027 and, at our election, may be extended for a period of one year on no more than two occasions, subject to the satisfaction of certain conditions, including the payment of an extension fee.
Removed
We also carry environmental liability insurance on our properties, which provides coverage for pollution liability, for third-party bodily injury and property damage claims. 6 Table of Contents Social and Governance Corporate Culture: Our strong tone at the top begins with the Board, which has demonstrated its focus on advancing openness, honesty, fairness and integrity within the Company.
Added
The 2027 Term Loan Agreement was entered into to replace the 2024 Term Loan (as defined below), which was paid off in its entirety upon closing of the 2027 Term Loan Agreement.
Removed
We have also filed our Registration Statements on Form S-11, Registration Statements on Form S-3, amendments to our Registration Statements and supplements to our prospectus in connection with our Offerings with the SEC. Copies of our filings with the SEC may be obtained from the SEC’s website, http://www.sec.gov. Access to these filings is free of charge.
Added
A tenant is considered creditworthy if it has a financial profile that we believe meets our criteria.
Added
We monitor tenant credit by: (1) reviewing the credit ratings of tenants (or their parent companies) that are rated by nationally recognized rating agencies; (2) reviewing financial statements that are publicly available or that are required to be delivered to us under the applicable lease; (3) monitoring industry reports and other available information regarding our tenants and their underlying businesses; (4) monitoring the timeliness of rent collections; and (5) conducting periodic inspections of our properties to ascertain patient utilization and proper maintenance, repair and upkeep.
Added
We had no exposure to geographic concentration that accounted for 10% or more of our rental revenue for the year ended December 31, 2024.
Added
Compliance with Governmental Regulations Our real estate properties are subject to various federal, state and local regulatory laws and requirements, including, but not limited to, zoning regulations, building codes and land use laws and building, accessibility, occupancy and other permit requirements. Noncompliance could result in the imposition of governmental fines or an award of damages to private litigants.
Added
We are committed to creating an open and accountable workplace where employees feel empowered to speak up and raise issues. With this in mind, we provide multiple channels to speak up, ask for guidance, and report concerns.
Added
We intend to use our website 7 Table of Contents as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD.
Added
Such disclosures will be included on our website under the heading “Investors.” Accordingly, investors should monitor such portion of our website in addition to following our press releases, public conference calls, and filings with the SEC.
Added
Our website and the information on our website are not incorporated by reference in this Annual Report on Form 10-K or in any other Securities and Exchange Commission filing we make under the Securities Act or Exchange Act.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

77 edited+78 added−28 removed108 unchanged
Biggest changeOur investments in properties where the underlying tenant has a below investment grade credit rating, as determined by major credit rating agencies, or unrated tenants, may have a greater risk of default and therefore may have an adverse impact on our returns on that asset and our operating results.
Biggest changeChanges in federal, state and local legislation and regulation on climate change could result in increased operating costs and/or increased capital expenditures to improve the energy efficiency of our existing properties and could also require us to spend more on our new properties without a corresponding increase in revenue and could increase our exposure to new physical risks and liabilities. 10 Table of Contents Our investments in properties where the underlying tenant has a below investment grade credit rating, as determined by major credit rating agencies, or unrated tenants, may have a greater risk of default and therefore may have an adverse impact on our returns on that asset and our operating results.
The generally fixed nature of revenues and the variable rate of debt obligations could create interest rate risk for us. Increases in interest rates may not be matched by increases in our rental income, which could increase our expenses and adversely affect our business, financial condition, results of operations, and our ability to make distributions to our stockholders.
The generally fixed nature of revenues and the variable rate of debt obligations could create interest rate risk for us. Increases in interest rates may not be matched by increases in our rental income, which could increase our expenses and adversely affect our business, financial condition, results of operations, and ability to make distributions to our stockholders.
Federal Income Tax Risks Failure to maintain our qualification as a REIT would adversely affect our operations and our ability to make distributions. In order for us to maintain our qualification as a REIT, we must satisfy certain requirements set forth in the Code and Treasury Regulations and various factual matters and circumstances that are not entirely within our control.
Federal Income Tax Risks Failure to maintain our qualification as a REIT would adversely affect our operations and ability to make distributions. In order for us to maintain our qualification as a REIT, we must satisfy certain requirements set forth in the Code and Treasury Regulations and various factual matters and circumstances that are not entirely within our control.
Such a recharacterization of an underlying property owner could also threaten our ability to maintain REIT status and would have a material adverse impact on us.
Such a recharacterization of an underlying property owner could also threaten our ability to maintain our REIT status and would have a material adverse impact on us.
Furthermore, if we fail to distribute during each calendar year at least the sum of: (a) 85% of our ordinary income for that year; (b) 95% of our capital gain net income for that year; and (c) any undistributed taxable income from prior periods, ((a) through (c), collectively referred to as the Required Distribution), we would have to pay a 4% nondeductible excise tax on the excess of the Required Distribution over the sum of (x) the amounts that we actually distributed; and the amounts we retained and upon which we paid income tax at the corporate level.
Furthermore, if we fail to distribute during each calendar year at least the sum of: (a) 85% of our ordinary income for that year; (b) 95% of our capital gain net income for that year; and (c) any undistributed taxable income from prior periods, ((a) through (c), collectively referred to as the Required Distribution), we would have to pay a 4% nondeductible excise tax on the excess of the Required Distribution over the sum of (x) the amounts that we actually distributed; and (y) the amounts we retained and upon which we paid income tax at the corporate level.
The healthcare industry is currently experiencing, among other things: changes in the demand for and methods of delivering healthcare services, particularly as telemedicine and telehealth continue to gain popularity, as well as continued innovation and integration of technological advancements and artificial intelligence; a shift in the provision of healthcare services from inpatient to outpatient settings; changes in third party reimbursement methods and policies, including an increased focus on value-based reimbursement with downside provider risk; consolidation and pressure to integrate within the healthcare industry through acquisitions, joint ventures and managed service organizations; increased scrutiny of billing, referral, and other practices by U.S. federal and state authorities; consolidation of health insurers; competition among healthcare providers including competition for patients among healthcare providers in areas with significant unused capacity; increased 12 Table of Contents expense for uninsured patients; increased expense arising from an older and sicker patient mix; increased liability insurance expenses; increased emphasis on compliance with privacy and security requirements related to health information; pressures on healthcare providers to control or reduce costs; staffing shortages (particularly nursing staff) and increases in wages as well as inflation in the cost of supplies; regulatory and government reimbursement uncertainty, increased price transparency resulting from the Transparency in Coverage rule and the Consolidated Appropriations Act of 2021, the Hospital Price Transparency regulation of 2021, the No Surprises Act and other healthcare reform laws and court decisions on cases challenging the legality of such laws; federal and state government plans to reduce budget deficits and address debt ceiling limits by lowering healthcare provider Medicaid payment rates; increased scrutiny of control over release of confidential patient medical information and increased attention to compliance with regulations designed to safeguard protected health information and cyberattacks on healthcare entities and their business associates (i.e., vendors who handle patient protected health information); anticipated increased scrutiny and enforcement of anti-trust laws by the Federal Trade Commission and Department of Justice Antitrust Division; and increased scrutiny of billing, referral and other practices by federal and state authorities.
The healthcare industry is currently experiencing, among other things: changes in the demand for and methods of delivering healthcare services, particularly as telemedicine and telehealth continue to gain popularity, as well as continued innovation and integration of technological advancements and artificial intelligence; a shift in the provision of healthcare services from inpatient to outpatient settings; changes in third party reimbursement methods and policies, including an increased focus on value-based reimbursement with downside provider risk; consolidation and pressure to integrate within the healthcare industry through acquisitions, joint ventures and managed service organizations; increased scrutiny of billing, referral, and other practices by U.S. federal and state authorities; consolidation of health insurers; competition among healthcare providers including competition for patients among healthcare providers in areas with significant unused capacity; increased expense for uninsured patients; increased expense arising from an older and sicker patient mix; increased liability insurance expenses; increased emphasis on compliance with privacy and security requirements related to health information; pressures on healthcare providers to control or reduce costs; staffing shortages (particularly nursing staff) and increases in wages as well as inflation in the cost of supplies; regulatory and government reimbursement uncertainty, increased price transparency resulting from the Transparency in Coverage rule and the Consolidated Appropriations Act of 2021, the Hospital Price Transparency regulation of 2021, the No Surprises Act and other healthcare reform laws and court decisions on cases challenging the legality of such laws; federal and state government plans to reduce budget deficits and address debt ceiling limits by lowering healthcare provider Medicaid payment rates; increased scrutiny of control over release of confidential patient medical information and increased attention to compliance with regulations designed to safeguard protected health information and cyberattacks on healthcare entities and their business associates (i.e., vendors who handle patient protected health information); and anticipated increased scrutiny and enforcement of anti-trust laws by the Federal Trade Commission and Department of Justice Antitrust Division.
This would also result in our losing REIT status, and becoming subject to a corporate level tax on our own income. This would substantially reduce our cash available to pay distributions and the yield on our stockholders’ investment.
This would also result in us losing our REIT status, and becoming subject to a corporate level tax on our own income. This would substantially reduce our cash available to pay distributions and the yield on our stockholders’ investment.
Distributions paid from sources other than our cash flows from operations, including from the proceeds of our Offerings, will result in us having fewer funds available for the acquisition of properties and real estate-related investments, which may adversely affect our ability to fund future distributions with cash flows from operations and may adversely affect a stockholder's overall return.
Distributions paid from sources other than our cash flows from operations, including from the proceeds of any offerings of our securities, will result in us having fewer funds available for the acquisition of properties and real estate-related investments, which may adversely affect our ability to fund future distributions with cash flows from operations and may adversely affect a stockholder's overall return.
No more than 20% of the value of our total assets can be represented by securities of one or more taxable REIT subsidiaries, and no more than 25% of the value of our assets may consist of "non-qualified publicly offered REIT instruments." If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences.
No more than 20% of the value of our total assets can be represented by securities of one or more TRS, and no more than 25% of the value of our assets may consist of "non-qualified publicly offered REIT instruments." If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences.
We are subject to risks related to tenant concentration, and an adverse development with respect to a large tenant could materially and adversely affect us. We had one exposure to tenant concentration that accounted for 10.0% or more of rental revenue for the year ended December 31, 2023.
We are subject to risks related to tenant concentration, and an adverse development with respect to a large tenant could materially and adversely affect us. We had one exposure to tenant concentration that accounted for 10.0% or more of rental revenue for the year ended December 31, 2024.
Our operating results are subject to risks generally incident to the ownership of real estate, which may prevent us from being profitable, realizing growth or maintaining the value of our real estate properties, including: changes in general economic or local conditions including inflationary and/or recessionary conditions; tenant turnover, technological changes and changes in supply of or demand for similar or competing properties in an area; changes in the cost or availability of insurance; changes in interest rates and availability of permanent mortgage funds that may render the sale of a property difficult or unattractive; changes in tax, real estate, environmental and zoning laws; and periods of high interest rates and tight money supply.
Our operating results are subject to risks generally incident to the ownership of real estate, which may prevent us from being profitable, realizing growth or maintaining the value of our real estate properties, including: changes in general economic or local conditions including inflationary and/or recessionary conditions; tenant turnover, technological changes and changes in supply of or demand for similar or competing properties in an area; changes in the cost or availability of insurance; changes in interest rates and availability of permanent mortgage funds that may render the sale of a property difficult or unattractive; and changes in tax, real estate, environmental and zoning laws.
If a lease is rejected, it is unlikely we would receive any material payments from the tenant because our claim is capped at the rent reserved under the lease, without acceleration, for the greater of one year or 15% of the remaining term of the lease, but not greater than three years, plus rent already due but unpaid.
If a lease is rejected, it is unlikely we would receive any material payments from the tenant because our claim is capped at the rent reserved under the lease, without acceleration, for the greater of one year or 15% 9 Table of Contents of the remaining term of the lease, but not greater than three years, plus rent already due but unpaid.
If we need additional capital to improve or maintain our properties or for any other reason, we will have to obtain financing from sources such as cash flow from operations, borrowings, property sales or future equity offerings. These sources of funding may not be available on attractive terms or at all.
If we need additional capital to improve or maintain our properties or for any other reason, we will have to obtain financing from sources such as cash flow from operations, borrowings, property sales or future equity offerings. These sources of funding may not be available 11 Table of Contents on attractive terms or at all.
A regional or local recession or a natural disaster in any of these areas could adversely affect our ability to generate or increase operating revenues, attract new tenants or dispose of unproductive properties.
A regional or local recession or a natural disaster or severe weather in any of these areas could adversely affect our ability to generate or increase operating revenues, attract new tenants or dispose of unproductive properties.
These factors may adversely affect demand for healthcare facilities by potential future tenants and/or the economic performance of some or all of our tenants and, in turn, our lease revenues, which may have a material adverse effect on our business, financial condition, results of operations, and our ability to make distributions to our stockholders.
These factors may adversely affect demand for healthcare facilities by potential future tenants and/or the economic performance of some or all of our tenants and, in turn, our lease revenues, which may have an adverse effect on our business, financial condition, results of operations, and ability to make distributions to our stockholders.
General Risks Related to Investments in Real Estate Our operating results may be affected by economic and regulatory changes that have an adverse impact on the real estate market in general, which may prevent us from being profitable or from realizing growth in the value of our real estate properties.
General Risks Related to Investments in Real Estate Our operating results may be affected by political, economic and regulatory changes that have an adverse impact on the global economy or the real estate market in general, which may prevent us from being profitable or from realizing growth in the value of our real estate properties.
Because of these and other reasons, our stockholders may experience substantial dilution in their percentage ownership of our shares. We may be unable to maintain cash distributions or increase distributions over time. There are many factors that can affect the availability and timing of cash distributions to stockholders.
Because of these and other reasons, our stockholders may experience substantial dilution in their percentage ownership of our shares. 8 Table of Contents We may be unable to maintain cash distributions or increase distributions over time. There are many factors that can affect the availability and timing of cash distributions to stockholders.
We intend to structure our activities in a manner designed to satisfy all of these requirements. However, if certain of our operations were to be recharacterized by the Internal Revenue Service, or IRS, such recharacterization could jeopardize our ability to satisfy all of the requirements for qualification as a REIT.
We intend to structure our activities in a manner designed to satisfy all of these requirements. However, if certain of our operations were to 16 Table of Contents be recharacterized by the Internal Revenue Service, or IRS, such recharacterization could jeopardize our ability to satisfy all of the requirements for qualification as a REIT.
For purposes of this paragraph, "unimproved real property" is real property which has not been acquired for the purpose of producing rental or other operating income, has no development or construction in process and on which no construction or development is planned in good faith to commence within one year.
For purposes of this paragraph, "unimproved real property" is real property which has not been acquired for the purpose of producing rental or other operating income, has no development or construction 12 Table of Contents in process and on which no construction or development is planned in good faith to commence within one year.
Currently, we do not have any Class T2 shares of stock or preferred stock outstanding. In addition, the Board, without any action by our stockholders, may amend our charter from time to time to increase or decrease the aggregate number of shares or the number of shares of any class or series of stock that we have authority to issue.
Currently, we do not have any preferred stock outstanding. The Board, without any action by our stockholders, may amend our charter from time to time to increase or decrease the aggregate number of shares or the number of shares of any class or series of stock that we have authority to issue.
Our desire to avoid the prohibited transactions tax may cause us to forego disposition opportunities that would otherwise be advantageous if we were not a REIT. 14 Table of Contents In certain circumstances, we may be subject to U.S. federal, state and local income taxes as a REIT, which would reduce our cash available for distribution to our stockholders.
Our desire to avoid the prohibited transactions tax may cause us to forego disposition opportunities that would otherwise be advantageous if we were not a REIT. In certain circumstances, we may be subject to U.S. federal, state and local income taxes as a REIT, which would reduce our cash available for distribution to our stockholders.
Additional changes to the tax laws are likely to continue to occur, and we cannot assure you that any such changes will not adversely affect our taxation 15 Table of Contents and our ability to continue to qualify as a REIT or the taxation of a stockholder.
Additional changes to the tax laws are likely to continue to occur, and we cannot assure you that any such changes will not adversely affect our taxation and our ability to continue to qualify as a REIT or the taxation of a stockholder.
In addition, many states also regulate the establishment and construction of healthcare facilities and services, and the expansion of existing healthcare facilities and services through a certificate of need, or CON, laws, which may include regulation of certain licenses, medical equipment, and capital expenditures.
Many states regulate the establishment and construction of healthcare facilities and services, and the expansion of existing healthcare facilities and services through a certificate of need, or CON, laws, which may include regulation of certain licenses, medical equipment, and capital expenditures.
Therefore, existing stockholders would experience dilution of their equity investment in us if we (i) sell additional shares in the future, including those issued pursuant to our DRIP Offering, (ii) sell securities that are convertible into shares of our common stock, (iii) issue shares of our common stock in a private offering of securities to institutional investors, (iv) issue restricted shares of our common stock to our independent directors and employees, or (v) issue shares of our common stock in a merger or to sellers of properties acquired by us in connection with an exchange of limited partnership interests of our Operating Partnership.
Therefore, existing stockholders would experience dilution of their equity investment in us if we (i) sell equity securities in the future, (ii) sell securities that are convertible into shares of our common stock, (iii) issue shares of our common stock in a private offering of securities to institutional investors, (iv) issue restricted shares of our common stock to our independent directors and employees, or (v) issue shares of our common stock in a merger or to sellers of properties acquired by us in connection with an exchange of limited partnership interests of our Operating Partnership.
While we intend that all transactions between us and our taxable REIT subsidiaries would be conducted on an arm’s-length basis, and therefore, any amounts paid by our taxable REIT subsidiaries to us would not be subject to the excise tax, no assurance can be given that excise tax would not arise from such transactions.
While we intend that all transactions between us and our TRS would be conducted on an arm’s-length basis, and therefore, any amounts paid by our TRS to us would not be subject to the excise tax, no assurance can be given that excise tax would not arise from such transactions.
If we amend our bylaws to repeal this exemption, the Maryland Control Share Acquisition Act would apply and would very likely make it more difficult for a third party to obtain control of us and increase the difficulty of consummating such an offer.
If our bylaws are amended to repeal this exemption, the Maryland Control Share Acquisition Act would apply and would very likely make it more difficult for a third party to obtain control of us and increase the difficulty of consummating such an offer.
In this respect, among other things, unless exempted (prospectively or retroactively) by the Board, no person may own (i) more than 9.8% in value of the aggregate of our outstanding shares (of any class or series, including common shares or preferred shares) of stock, or (ii) more than 9.8% (in value or number, whichever is more 7 Table of Contents restrictive) of the aggregate of the outstanding shares of only our common stock.
In this respect, among other things, unless exempted (prospectively or retroactively) by the Board, no person (as defined in our charter) may own (i) more than 9.8% in value of the aggregate of our outstanding shares (of any class or series, including common shares or preferred shares) of stock, or (ii) more than 9.8% (in value or number, whichever is more restrictive) of the aggregate of the outstanding shares of only our common stock.
During inflationary periods, interest rates have historically increased, which would have a direct effect on the interest expense of our borrowings. As of December 31, 2023, we have hedged all of our variable rate debt by using interest rate swaps to effectively fix the interest rate.
During inflationary periods, interest rates have historically increased, which would have a direct effect on the interest expense of our borrowings. 15 Table of Contents As of December 31, 2024, we have hedged all of our variable rate debt by using interest rate swaps to effectively fix the interest rate.
We believe that our assets should not be treated as plan assets because the shares should qualify as "publicly-offered securities" that are exempt from the look-through rules under applicable Treasury Regulations.
Nevertheless, we believe that our assets are not ERISA plan assets because the shares should qualify as "publicly-offered securities" that are exempt from the look-through rules under applicable Treasury Regulations.
As permitted by the MGCL, however, our bylaws exempt the Company from the application of the Maryland Control Share 8 Table of Contents Acquisition Act.
As permitted by the MGCL, however, our bylaws exempt the Company from the application of the Maryland Control Share Acquisition Act.
In addition, in general, no more than 5% of the value of our assets can consist of the securities (other than government securities, taxable REIT subsidiaries, and qualified real estate assets) of any one issuer.
In addition, in general, no more than 5% of the value of our assets can consist of the securities (other than government securities, TRS, and qualified real estate assets) of any one issuer.
The remainder of our investment in securities (other than government securities, taxable REIT subsidiaries and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer.
The remainder of our investment in securities (other than government securities, TRS and qualified real estate assets) generally cannot include more than 10% of the total voting power of the outstanding securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer.
If our leases are not respected as true leases for U.S. federal income tax purposes, we could fail to qualify as a REIT, which would materially and adversely impact the value of an investment in our shares and in our ability to pay dividends to our stockholders. Legislative or regulatory action could adversely affect the returns to our investors.
If our leases are not respected as true leases for U.S. federal income tax purposes, we could fail to qualify as a REIT, which would materially and adversely impact the value of an investment in our shares and in our ability to pay dividends to our stockholders.
The leases with tenants under common control of Post Acute Medical LLC accounted for 14.5% of rental revenue for the year ended December 31, 2023.
The leases with tenants under common control of Post Acute Medical LLC accounted for 14.9% of rental revenue for the year ended December 31, 2024.
In some instances we may sell our properties by providing financing to purchasers. When we provide financing to purchasers, we will bear the risk that the purchaser may default, which could negatively impact our cash distributions to stockholders.
If we sell properties by providing financing to purchasers, defaults by the purchasers would adversely affect our cash flows. In some instances we may sell our properties by providing financing to purchasers. When we provide financing to purchasers, we will bear the risk that the purchaser may default, which could negatively impact our cash distributions to stockholders.
Such laws and regulations include, but are not limited to: the Medicare and Medicaid statutes; the Stark Law; the civil False Claims Act; the federal False Claims Law; the federal Anti-Kickback Statute; applicable state law prohibitions against kickbacks, fraud and abuse, patient brokering, advertising and marketing of healthcare items and services and fee splitting; state laws regulating the corporate practice of medicine; the federal Eliminating Kickbacks in Recovery Act; the Program Fraud Civil Remedies Act; the Civil Monetary Penalties Law; the Exclusion Laws; the Health Insurance Portability and Accountability Act of 1996 and applicable state laws regarding patient privacy and the security of patient health information; the Clinical Laboratory Improvement Amendments of 1988; the Travel Act; OIG compliance program elements; and all amendments thereto of the foregoing, including any regulations or decisions promulgated thereunder.
Relevant laws and regulations include, but are not limited to: the Medicare and Medicaid statutes; the Stark Law; the civil False Claims Act; the federal False Claims Law; the federal Anti-Kickback Statute; state law prohibitions against kickbacks, fraud and abuse, patient brokering, advertising and marketing of healthcare items and services and fee splitting; state laws regulating the corporate practice of medicine; the federal Eliminating Kickbacks in Recovery Act; the Program Fraud Civil Remedies Act; the Civil Monetary Penalties Law; the Exclusion Laws; the Emergency Medical Treatment & Labor Act; the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act; applicable state laws regarding patient privacy and security of patient health information; the Clinical Laboratory Improvement Amendments of 1988; the Travel Act; OIG compliance program elements; and all amendments thereto, including any related regulations or decisions.
Our charter permits the Board to issue stock with terms that may subordinate the rights of common stockholders or discourage a third party from acquiring us in a manner that might result in a premium price to our stockholders.
Our charter permits the Board to issue stock with terms that may subordinate the rights of common stockholders or discourage a third party from acquiring us in a manner that might result in a premium price to our stockholders. Our charter permits the Board to issue up to 510,000,000 shares of common stock and 100,000,000 shares of preferred stock.
In recent years, numerous legislative, judicial and administrative changes have been made in the provisions of U.S. federal income tax laws applicable to investments similar to an investment in shares of our common stock.
Legislative or regulatory action could adversely affect the returns to our investors. In recent years, numerous legislative, judicial and administrative changes have been made in the provisions of U.S. federal income tax laws applicable to investments similar to an investment in shares of our common stock.
Any reduction in rental revenues resulting from the inability of our healthcare properties and our tenants to compete successfully may have a material adverse effect on our business, financial condition and results of operations and our ability to make distributions to our stockholders.
This could adversely affect our tenants’ ability to make rental payments, which could adversely affect our rental revenues. Any reduction in rental revenues resulting from the inability of our healthcare properties and our tenants to compete successfully may have an adverse effect on our business, financial condition and results of operations and ability to make distributions to our stockholders.
We may pay, and have no limits on the amounts we may pay, distributions from any source, such as the sale of assets, the sale of additional securities and funds equal to amounts reinvested in the DRIP, which may reduce the amount of capital we ultimately invest in properties or other permitted investments.
We may pay, and have no limits on the amounts we may pay, distributions from any source, such as the sale of assets and the sale of additional securities, which may reduce the amount of capital we ultimately invest in properties or other permitted investments. Funding distributions from the sale of assets may affect our ability to generate cash flows.
We also may be subject to state and local taxes on our income or property, either directly or indirectly through our Operating Partnership or other companies through which we indirectly own assets. Any taxes we pay would reduce our cash available for distribution to our stockholders.
We also may be subject to state and local taxes on our income or property, either directly or indirectly through our Operating Partnership or other companies through which we indirectly own assets.
Some of our leases will not contain rental increases over time, or the rental increases may be less than the fair market rate at a future point in time.
Some of our leases will not contain rental increases over time, the rental increases may be less than the fair market rate at a future point in time, or we may not be able to renew or re-lease space at current rents.
If a given lease, or guaranty of a lease, is not assumed, our cash flow and the amounts available for distributions to our stockholders may be adversely affected.
If a given lease, or guaranty of a lease, is not assumed, our cash flow and the amounts available for distributions to our stockholders may be adversely affected. Sponsors and owners of tenants at certain of our properties have previously declared bankruptcy.
If we were to fail to so qualify, any gain realized by foreign investors on a sale of our shares would be subject to FIRPTA tax, unless our shares were traded on an established securities market and the foreign investor did not at any time during a specified testing period directly or indirectly own more than 10% of the value of our outstanding common stock.
If we were to fail to so qualify, any gain realized by foreign investors on a sale of our shares would be subject to FIRPTA tax, unless our shares were traded on an established securities market and the foreign investor did not at any time during a specified testing period directly or indirectly own more than 10% of the value of our outstanding common stock. 19 Table of Contents A foreign investor also may be subject to FIRPTA tax upon the payment of any capital gain dividend by us, which dividend is attributable to gain from sales or exchanges of U.S. real property interests.
The purchase of properties with limited warranties increases the risk that we may lose some or all of our invested capital in the property as well as the loss of rental income from that property.
As a result, we may have no recourse or limited recourse against the prior owners with respect to unknown liabilities. The purchase of properties with limited warranties increases the risk that we may lose some or all of our invested capital in the property as well as the loss of rental income from that property.
At this time, we have no taxable REIT subsidiaries. Complying with REIT requirements may force us to forgo and/or liquidate otherwise attractive investment opportunities.
Complying with REIT requirements may force us to forgo and/or liquidate otherwise attractive investment opportunities.
If any purchaser defaults under a financing arrangement with us, it could negatively impact our ability to pay cash distributions to our stockholders. 11 Table of Contents Risks Associated with Investments in the Healthcare Property Sector Our properties and tenants may be unable to compete successfully, which could result in lower rent payments, reduce our cash flows from operations and the amount available for distributions to our stockholders.
Risks Associated with Investments in the Healthcare Property Sector Our properties and tenants may be unable to compete successfully, which could result in lower rent payments, reduce our cash flows from operations and the amount available for distributions to our stockholders.
Therefore, the value of the property to a potential purchaser may not increase over time, which may restrict our ability to sell a property, or if we are able to sell such property, may lead to a sale price less than the price that we paid to purchase the property. 10 Table of Contents Real estate-related taxes may increase and if these increases are not passed on to tenants, our income will be reduced.
Therefore, the value of the property to a potential purchaser may not increase over time, which may restrict our ability to sell a property, or if we are able to sell such property, may lead to a sale price less than the price that we paid to purchase the property.
The costs of complying with these laws and regulations may have a material adverse effect on our business, financial condition and results of operations and our ability to make distributions to our stockholders. If we sell properties by providing financing to purchasers, defaults by the purchasers would adversely affect our cash flows.
The costs of complying with these laws and regulations may have a material adverse effect on our business, financial condition and results of operations and ability to make distributions to our stockholders.
Further, we would incur a 100% excise tax on transactions with our taxable REIT subsidiaries that are not conducted on an arm’s-length basis. For example, to the extent that the rent paid by one of our taxable REIT subsidiaries exceeds an arm’s-length rental amount, such amount would be potentially subject to a 100% excise tax.
For example, to the extent that the rent paid by one of our TRS exceeds an arm’s-length rental amount, such amount would be potentially subject to a 100% excise tax.
We have broad authority to incur debt, and high debt levels could hinder our ability to make distributions and could decrease the value of our stockholders’ investments. High debt levels would cause us to incur higher interest charges, would result in higher debt service payments, and could be accompanied by restrictive covenants.
High debt levels would cause us to incur higher interest charges, would result in higher debt service payments, and could be accompanied by restrictive covenants. These factors could limit the amount of cash we have available to distribute and could result in a decline in the value of our stockholders’ investments.
Healthcare provider tenants may be subject to numerous laws and regulations that regulate, among other things, quality and medical necessity of care, insurance and patient billing, the security and privacy of patient information, healthcare provider financial interests and conflicts of interest, self-referrals, price transparency, corporate practice of medicine and surprise billing.
These include regulations concerning the quality and medical necessity of care, insurance and patient billing, the security and privacy of patient information, healthcare provider financial interests and conflicts of interest, self-referrals, price transparency, corporate practice of medicine and surprise billing.
GenesisCare USA, Inc. and its affiliates, or GenesisCare, a sponsor and owner of the tenant in 17 of our real estate properties, announced that it filed for Chapter 11 bankruptcy protection under the United States Bankruptcy Code on June 1, 2023. GenesisCare emerged from bankruptcy on February 16, 2024.
As disclosed in the Current Report on Form 8-K that we filed with the SEC on June 5, 2023, GenesisCare USA, Inc. and its affiliates, or GenesisCare, the sponsor and owner of the tenant in certain of our real estate properties announced that it filed for Chapter 11 bankruptcy protection under the United States Bankruptcy Code on June 1, 2023.
If we cannot procure additional funding for capital improvements, our investments may generate lower cash flows or decline in value, or both.
If we cannot procure additional funding for capital improvements, our investments may generate lower cash flows or decline in value, or both. Our ability to fully control the maintenance of our net leased properties may be limited.
As discussed above, GenesisCare, a sponsor and owner of the tenant in 17 of our real estate properties, filed for Chapter 11 bankruptcy protection on June 1, 2023.
As discussed above, GenesisCare, a sponsor and owner of the tenant in seven of our real estate properties, and Steward, the sponsor and owner of a tenant at the Stoughton Healthcare Facility, filed for Chapter 11 bankruptcy protection on June 1, 2023 and May 6, 2024, respectively. GenesisCare emerged from bankruptcy on February 16, 2024.
During the year ended December 31, 2023, approximately 44.3% of our total rental revenue was derived from tenants that had an investment grade credit rating from a major ratings agency, or an investment grade rated guarantor or affiliate, 6.2% of our total rental revenue was derived from tenants that were rated but did not have an investment grade credit rating from a major ratings agency and 49.5% of our total rental revenue was derived from tenants that were not rated.
Approximately 38.3% of our annualized contractual base rental revenue as of December 31, 2024 was derived from tenants that had either an investment grade credit rating from a major ratings agency, or had an investment grade rated guarantor or affiliate, 28.6% of our annualized contractual base rental revenue as of December 31, 2024 was derived from tenants that were rated but did not have an investment grade credit rating from a major ratings agency and 33.1% of our annualized contractual base rental revenue as of December 31, 2024 was derived from tenants that were not rated.
The MGCL, our charter, and our bylaws contain provisions that may discourage, delay or make more difficult a change in control of the Company. We are subject to the Maryland Business Combination Act, which may discourage third parties from trying to acquire control of us and increase the difficulty of consummating such an offer.
We are subject to the Maryland Business Combination Act, which may discourage third parties from trying to acquire control of us and increase the difficulty of consummating such an offer.
The failure to comply with these laws and regulations, or the failure to secure CON approval to undertake a desired project could adversely affect our tenants’ ability to make rent payments to us which may have an adverse effect on our business, financial condition, and results of operations, and our ability to make distributions to our stockholders.
Non-compliance with these laws and regulations could have legal and financial consequences that adversely affect our tenants’ ability to make rent payments which could have an adverse effect on our business, financial condition, results of operations, and ability to make distributions to our stockholders.
These disruptions in the credit markets have not thus far affected our ability to borrow monies to finance the purchase of, or other activities related to, real estate assets, but they 13 Table of Contents may do so in the future.
If debt financing is not available on terms and conditions we find acceptable, we may not be able to obtain financing for investments. These disruptions in the credit markets have not thus far affected our ability to borrow monies to finance the purchase of, or other activities related to, real estate assets, but they may do so in the future.
Some local real property tax assessors may seek to reassess some of our properties as a result of our acquisition of such properties. From time to time our property taxes may increase as property values or assessment rates change or for other reasons deemed relevant by the assessors.
From time to time our property taxes may increase as property values or assessment rates change or for other reasons deemed relevant by the assessors. An increase in the assessed valuation of a property for real estate tax purposes will result in an increase in the related real estate taxes on that property.
Compliance with and changes to healthcare laws and regulations could have a material adverse effect on the financial condition of our tenants and, consequently, their ability to make rent payments and meet obligations to us.
Compliance with and changes to healthcare laws and regulations could have an adverse effect on the financial condition of our tenants and, consequently, their ability to make rent payments and meet obligations to us. Tenants of our healthcare properties may be required to hold appropriate licenses and secure regulatory approvals for initial or continued operation.
Funding distributions to our stockholders will result in us having less funds available for acquiring properties or real estate-related investments. Our inability to acquire such properties or investments may have a negative effect on our ability to generate sufficient cash flows from operations to pay distributions.
Our inability to acquire such properties or investments may have a negative effect on our ability to generate sufficient cash flows from operations to pay distributions.
The use of taxable REIT subsidiaries, which may be required for REIT qualification purposes, would increase our overall tax liability and thereby reduce our cash available for distribution to our stockholders. Some of our assets may need to be owned by, or operations may need to be conducted through, one or more taxable REIT subsidiaries.
Any taxes we pay would reduce our cash available for distribution to our stockholders. 17 Table of Contents The use of taxable REIT subsidiaries which may be required for REIT qualification purposes, would increase our overall tax liability and thereby reduce our cash available for distribution to our stockholders.
When providing financing, a lender could impose restrictions on us that affect our distribution and operating policies, and our ability to incur additional debt. Loan documents we enter into may contain covenants that limit our ability to discontinue insurance coverage.
Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions to stockholders at our current level. When providing financing, a lender could impose restrictions on us that affect our distribution and operating policies, and our ability to incur additional debt.
In the past, domestic and international financial markets experienced significant disruptions which were brought about in large part by failures in the U.S. banking system. International conflicts and resultant U.S. response, including financial sanctions, have recently disrupted credit markets. These disruptions have severely impacted the availability of credit in the market and contributed to rising costs associated with obtaining credit.
Additionally, in the past, international conflicts and the resultant U.S. response, including financial sanctions, have disrupted credit markets. These disruptions could severely impact the availability of credit in the market and/or contribute to rising costs associated with obtaining credit.
Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results.
We cannot assure you that the market price of our Common Stock will not fluctuate or decline significantly in the future. 20 Table of Contents General Risk Factors Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results.
Such claims may cause our tenants to incur punitive damages arising from professional liability and general liability claims and/or become subject to governmental investigations, enforcement actions or litigation.
Our tenants' operations may become subject to legal claims that their services have resulted in patient injury or other adverse effects in violation of applicable laws. Such claims may cause our tenants to incur punitive damages arising from professional liability and general liability claims and/or become subject to governmental investigations, enforcement actions or litigation.
There is a geographic concentration of risk subject to fluctuations in the economies of the various metropolitan statistical area, or MSA's, in which we own properties. Geographic concentration of our properties exposes us to risks related to or arising from economic downturns or natural disasters in the areas where our properties are located.
Geographic concentration of our properties exposes us to risks related to or arising from economic downturns or natural disasters and severe weather in the areas where our properties are located.
We may borrow if we need funds to pay a desired distribution rate to our stockholders. We may also borrow if we deem it necessary or advisable to ensure that we qualify and maintain our qualification as a REIT for federal income tax purposes.
We may also borrow if we deem it necessary or advisable to ensure that we qualify and maintain our qualification as a REIT for federal income tax purposes. If there is a shortfall between the cash flow from our properties and the cash flow needed to service debt, then the amount available for distribution to our stockholders may be reduced.
Any of our taxable REIT subsidiaries would be subject to U.S. federal, state and local income tax on its taxable income at applicable corporate rates. The after-tax net income of our taxable REIT subsidiaries would be available for distribution to us.
Some of our assets may need to be owned by, or operations may need to be conducted through, one or more taxable REIT subsidiaries, or TRS. Any of our TRS would be subject to U.S. federal, state and local income tax on its taxable income at applicable corporate rates.
We cannot assure our stockholders that we will be able to maintain our current level of distributions or that distributions will increase over time. Provisions of the Maryland General Corporation Law, or the MGCL, and of our charter and bylaws could deter takeover attempts and have an adverse impact on a stockholder’s ability to exit the investment .
Provisions of the Maryland General Corporation Law, or the MGCL, and of our charter and bylaws could deter takeover attempts and have an adverse impact on a stockholder’s ability to exit the investment . The MGCL, our charter, and our bylaws contain provisions that may discourage, delay or make more difficult a change in control of the Company.
Funding distributions from the sale of assets may affect our ability to generate cash flows. Funding distributions from the sale of additional securities could dilute stockholders' interest in us if we sell shares of our common stock to third party investors.
Funding distributions from the sale of additional securities could dilute stockholders' interest in us if we sell shares of our common stock to third party investors. Funding distributions to our stockholders will result in us having less funds available for acquiring properties or real estate-related investments.
We have obtained a credit facility and may obtain other similar financing arrangements in order to acquire properties. We may also decide to later further leverage our properties. We may pledge all or some of our real properties as security for that debt to obtain funds to acquire real properties.
We incur borrowings, which may increase our business risks, and could hinder our ability to make distributions to our stockholders. We have obtained a credit facility and may obtain other similar financing arrangements in order to acquire properties. We may also decide to later further leverage our properties.
These or other limitations may adversely affect our flexibility and limit our ability to make distributions to stockholders at our current level. Disruptions in the credit markets could have a material adverse effect on our results of operations, financial condition and ability to pay distributions to stockholders at our current level.
Disruptions in the credit markets could have a material adverse effect on our results of operations, financial condition and ability to pay distributions to stockholders at our current level. In the past, domestic and international financial markets experienced significant disruptions which were brought about in large part by failures in the U.S. banking system.
At this time there can be no assurance as to how our lease negotiations will be resolved and how such negotiations may impact GenesisCare's obligations under the lease, as further discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7, of this Annual Report on Form 10-K.
The Stoughton Healthcare Facility is vacant as of December 31, 2024. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7, of this Annual Report on Form 10-K for further discussion on GenesisCare and Steward.
We encourage our stockholders to consult their own tax advisor to determine the tax consequences applicable to them if they are a foreign investor. 16 Table of Contents ERISA Risks If our assets are deemed to be ERISA plan assets, we may be exposed to liabilities under Title I of ERISA and the Internal Revenue Code.
We encourage our stockholders to consult their own tax advisor to determine the tax consequences applicable to them if they are a foreign investor. REIT ownership limitations may restrict or prevent you from engaging in certain transfers of our common stock.
If debt financing is not available on terms and conditions we find acceptable, we may not be able to obtain financing for investments.
We also may not be able to lease space which is currently not occupied on acceptable terms and conditions, if at all. Portions of our assets may remain vacant for extended periods of time.
Removed
Our charter permits the Board to issue up to 510,000,000 shares of common stock, of which 185,000,000 are designated as Class A shares, 75,000,000 are designated as Class I shares, 175,000,000 are designated as Class T shares, and 75,000,000 are designated as Class T2 shares, and 100,000,000 shares of preferred stock.
Added
We cannot assure our stockholders that we will be able to maintain our current level of distributions or that distributions will increase over time. Our stockholders are subject to the risk that our business and operating plans may change. The Board may change our investment objectives, targeted investments, borrowing policies or other corporate policies without stockholder approval.
Removed
The master lease related to our 17 properties was assumed by the emerging entity and therefore remains in force under its existing terms.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

10 edited+2 added−2 removed4 unchanged
Biggest changeOur Board plays a role in overseeing risks associated with cybersecurity threats and has delegated to the Audit Committee primary oversight of the Cybersecurity Program. Our executive officers report on our Cybersecurity Program to both the Board and the Audit Committee at least four times per year (including as part of our discussions regarding enterprise risk management).
Biggest changeOur executive officers report on our Cybersecurity Program to the Audit Committee at least four times per year (including as part of our discussions regarding enterprise risk management). Our quarterly updates to the Audit Committee include a discussion of our information security programs and controls, including our internal auditor's review and our internal monitoring of cybersecurity risks.
As part of the incident response plan discussed above, in the event we experience a cybersecurity incident that could materially affect us, including our business strategy, results of operations or financial condition, our executive officers (who are also a part of the Cybersecurity Management Committee) will review the incident with the Audit Committee to consider whether and to what extent disclosure is required under Item 1.05 of Form 8-K.
As part of the incident response plan discussed above, in the event we experience a cybersecurity incident that could materially affect us, including our business strategy, results of operations or financial condition, our executive officers (who are also a part of the Cybersecurity Management Team) will review the incident with the Audit Committee to consider whether and to what extent disclosure is required under Item 1.05 of Form 8-K.
Led by Our Vice President of Information Technology & Corporate Facilities, our Cybersecurity Management Committee is responsible for the management of the Cybersecurity Program and for the day-to-day investigation of and response to potential information security-related incidents.
Led by our Vice President of Information Technology & Corporate Facilities, our Cybersecurity Management Team is responsible for the management of the Cybersecurity Program and for the day-to-day investigation of and response to potential information security-related incidents.
Pursuant to our incident response plan, incidents meeting specified severity levels are required to be escalated to the Cybersecurity Management Committee for review and response.
Pursuant to our incident response plan, incidents meeting specified severity levels are required to be escalated to the Cybersecurity Management Team for review and response.
Through our incident response plan, we have designated a cybersecurity management committee, or the Cybersecurity Management Committee, composed of our executive officers and management representatives.
Through our incident response plan, we have designated a cybersecurity management team, or the Cybersecurity Management Team, composed of our executive officers and management representatives.
The Cybersecurity Program utilizes a threat-centric and risk-based approach to identify and assess cybersecurity threats that could affect our business and information systems based on the National Institute of Standards and Technology Cybersecurity Framework, or the NIST Framework.
The Cybersecurity Program aims to prevent data ex-filtration, manipulation, and destruction, as well as system and transactional disruption. The Cybersecurity Program utilizes a threat-centric and risk-based approach to identify and assess cybersecurity threats that could affect our business and information systems based on the National Institute of Standards and Technology Cybersecurity Framework, or the NIST Framework.
To date, we have not experienced a material cybersecurity incident. 19 Table of Contents
To date, we have not experienced a material cybersecurity incident.
Our Cybersecurity Program includes the following processes: • Quarterly control reviews, annual policy reviews and annual investments in our security infrastructure; • Periodic testing of our information systems to assess our vulnerability to cyber risk, which includes targeted penetration testing and vulnerability scanning; • Testing and audits of our IT-related internal controls over financial reporting, excluding cybersecurity controls, by our internal auditors; • Conducting a comprehensive information security and training program for our employees, including mandatory computer-based training, regular internal communications, and ongoing end-user testing to measure the effectiveness of our information security program.
Our Cybersecurity Program includes the following processes: • Annual control reviews, annual policy reviews and annual investments in our security infrastructure; • Periodic testing of our information systems to assess our vulnerability to cyber risk, which includes targeted penetration testing and vulnerability scanning; • Collaborating with our internal audit team to evaluate the effectiveness of our information technology security program and communicating results to our executive officers; • Conducting a comprehensive information security and training program for our employees, including mandatory computer-based training, regular internal communications, and ongoing end-user testing to measure the effectiveness of our information security program.
The goals of the incident response plan are to prevent, detect and react to information security incidents, determine their scope and risk, respond appropriately to the incident, communicate the results and risk to relevant stakeholders, and reduce the likelihood of the incident from reoccurring.
The goals of the incident response plan are to prevent, detect and react to information security incidents, determine their scope and risk, respond appropriately to the incident, communicate the results and risk to relevant stakeholders, and reduce the likelihood of the incident from reoccurring. Our Vice President of Information Technology & Corporate Facilities has served in this role since 2018.
Item 1C. Cybersecurity. We have developed, implemented, and integrated a cybersecurity program, or the Cybersecurity Program, to protect our information systems by using physical, technical, and administrative safeguards. This includes assessing, identifying, monitoring, reporting, managing and remediating cybersecurity threats. The Cybersecurity Program aims to prevent data ex-filtration, manipulation, and destruction, as well as system and transactional disruption.
Item 1C. Cybersecurity. We have developed, implemented, and integrated a cybersecurity program, or the Cybersecurity Program, into our broader risk management structure to protect our information systems by using physical, technical, and administrative safeguards. This includes assessing, identifying, monitoring, reporting, managing and remediating cybersecurity threats.
Removed
Our Vice President of Information Technology & Corporate Facilities has served in this role since 2018, and has more than 25 years of experience in various roles involving managing information security, technology infrastructure and IT operations.
Added
In this role, he manages and oversees the Company's network and information systems. Additionally, he works with the executive officers, management representatives and third-party experts to maintain the Company's Cybersecurity Program.
Removed
In addition, quarterly reports to the Audit Committee include our internal auditor's reviews of our information security programs and controls.
Added
Our Vice President of Information Technology & Corporate Facilities possesses extensive experience in technology and cybersecurity gained over his career spanning more than 25 years, including service as the executive director of Business Applications as well as a senior implementer and business consultant. 22 Table of Contents The Board plays a role in overseeing risks associated with cybersecurity threats and has delegated to the Audit Committee primary oversight of the Cybersecurity Program.

Item 2. Properties

Properties — owned and leased real estate

9 edited+1 added−0 removed3 unchanged
Biggest changeAs of December 31, 2023, all of our real estate investments are in healthcare properties and undeveloped land parcels. 20 Table of Contents Property Statistics The following table shows the property statistics of our real estate portfolio as of December 31, 2023: Property Name MSA/µSA Date Acquired Year Constructed Year Renovated % Leased Leased Sq Ft Encumbrances, $ (in thousands) Houston Healthcare Facility Houston-Pasadena-The Woodlands, TX 07/31/2014 1993 — 100% 13,645 (1) Cincinnati Healthcare Facility Cincinnati, OH-KY-IN 10/29/2014 2001 — 100% 14,868 (1) Winston-Salem Healthcare Facility Winston-Salem, NC 12/17/2014 2004 — 100% 22,200 (1) Stoughton Healthcare Facility Boston-Cambridge-Newton, MA-NH 12/23/2014 1973 1997 100% 180,744 (1) Fort Worth Healthcare Facility Dallas-Fort Worth-Arlington, TX 12/31/2014 2014 — 100% 83,464 (1) Fort Worth Healthcare Facility II Dallas-Fort Worth-Arlington, TX 12/31/2014 2014 — 100% 8,268 (1) Winter Haven Healthcare Facility Lakeland-Winter Haven, FL 01/27/2015 2009 — 100% 7,560 (1) Overland Park Healthcare Facility Kansas City, MO-KS 02/17/2015 2014 — 100% 54,568 (1) Clarion Healthcare Facility Pittsburgh, PA 06/01/2015 2012 — 100% 33,000 (1) Webster Healthcare Facility Houston-Pasadena-The Woodlands, TX 06/05/2015 2015 — 100% 53,514 (1) Augusta Healthcare Facility Augusta-Waterville, ME (µSA) 07/22/2015 2010 — 100% 51,000 (1) Cincinnati Healthcare Facility III Cincinnati, OH-KY-IN 07/22/2015 2014 — 100% 41,600 (1) Florence Healthcare Facility Cincinnati, OH-KY-IN 07/22/2015 2014 — 100% 41,600 (1) Oakland Healthcare Facility Augusta-Waterville, ME (µSA) 07/22/2015 2004 — 100% 20,000 (1) Wyomissing Healthcare Facility Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 07/24/2015 2007 — 100% 33,217 (1) Luling Healthcare Facility Austin-Round Rock-San Marcos, TX 07/30/2015 2003 — 100% 40,901 (1) Omaha Healthcare Facility Omaha, NE-IA 10/14/2015 2014 — 100% 40,402 (1) Sherman Healthcare Facility Sherman-Denison, TX 11/20/2015 2005 2010 100% 57,576 (1) Sherman Healthcare Facility II Sherman-Denison, TX 11/20/2015 2005 — 100% 8,055 (1) Fort Worth Healthcare Facility III Dallas-Fort Worth-Arlington, TX 12/23/2015 1998 2007/2015 100% 36,800 (1) Oklahoma City Healthcare Facility Oklahoma City, OK 12/29/2015 1985 1998/2003 100% 94,076 (1) Oklahoma City Healthcare Facility II Oklahoma City, OK 12/29/2015 1994 1999 100% 41,394 (1) Edmond Healthcare Facility Oklahoma City, OK 01/20/2016 2002 — 100% 17,700 (1) Oklahoma City Healthcare Facility III Oklahoma City, OK 01/27/2016 2006 — 100% 5,000 (1) Oklahoma City Healthcare Facility IV Oklahoma City, OK 01/27/2016 2007 — 100% 8,762 (1) Newcastle Healthcare Facility Oklahoma City, OK 02/03/2016 1995 1999 100% 7,424 (1) Oklahoma City Healthcare Facility V Oklahoma City, OK 02/11/2016 2008 — 100% 43,676 (1) Rancho Mirage Healthcare Facility Riverside-San Bernardino-Ontario, CA 03/01/2016 2018 — 100% 47,008 (1) Oklahoma City Healthcare Facility VI Oklahoma City, OK 03/07/2016 2007 — 100% 14,676 (1) Oklahoma City Healthcare Facility VII Oklahoma City, OK 06/22/2016 2016 — 100% 102,978 (1) Las Vegas Healthcare Facility Las Vegas-Henderson-North Las Vegas, NV 06/24/2016 2017 — 100% 56,220 (1) Oklahoma City Healthcare Facility VIII Oklahoma City, OK 06/30/2016 1997 2008 100% 62,857 (1) Marlton Healthcare Facility Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 11/01/2016 1995 — 100% 89,139 (1) Grand Rapids Healthcare Facility Grand Rapids-Wyoming-Kentwood, MI 12/07/2016 2008 — 84% 90,150 (1) Corpus Christi Healthcare Facility Corpus Christi, TX 12/22/2016 1992 2016 100% 25,102 (1) Aurora Healthcare Facility Chicago-Naperville-Elgin, IL-IN 03/30/2017 2002 — 100% 24,722 (1) Allen Healthcare Facility Dallas-Fort Worth-Arlington, TX 03/31/2017 2007 — 100% 42,627 (1) Austin Healthcare Facility Austin-Round Rock-San Marcos, TX 03/31/2017 2012 — 100% 66,095 (1) Beaumont Healthcare Facility Beaumont-Port Arthur, TX 03/31/2017 1991 — 100% 61,000 (1) San Antonio Healthcare Facility San Antonio-New Braunfels, TX 06/29/2017 1984 (2) 100% 44,746 (1) Silverdale Healthcare Facility Bremerton-Silverdale-Port Orchard, WA 08/25/2017 2005 — 100% 26,127 (1) Silverdale Healthcare Facility II Bremerton-Silverdale-Port Orchard, WA 09/20/2017 2007 — 100% 19,184 (1) Saginaw Healthcare Facility Saginaw, MI 12/21/2017 2002 — 100% 87,843 (1) Carrollton Healthcare Facility Dallas-Fort Worth-Arlington, TX 04/27/2018 2015 — 100% 21,990 (1) Katy Healthcare Facility Houston-Pasadena-The Woodlands, TX 06/08/2018 2015 — 100% 34,296 (1) Indianola Healthcare Facility Des Moines-West Des Moines, IA 09/26/2018 2014 — 100% 18,116 (1) 21 Table of Contents Property Name MSA/µSA Date Acquired Year Constructed Year Renovated % Leased Leased Sq Ft Encumbrances, $ (in thousands) Indianola Healthcare Facility II Des Moines-West Des Moines, IA 09/26/2018 2011 — 100% 20,990 (1) Benton Healthcare Facility Little Rock-North Little Rock-Conway, AR 10/17/2018 1992/1999 2012 100% 104,419 (1) Benton Healthcare Facility II Little Rock-North Little Rock-Conway, AR 10/17/2018 1983 — 100% 11,350 (1) Bryant Healthcare Facility Little Rock-North Little Rock-Conway, AR 10/17/2018 1995 — 100% 23,450 (1) Hot Springs Healthcare Facility Little Rock-North Little Rock-Conway, AR 10/17/2018 2009 — 100% 8,573 (1) Clive Healthcare Facility Des Moines-West Des Moines, IA 11/26/2018 2008 — 100% 58,156 (1) Valdosta Healthcare Facility Valdosta, GA 11/28/2018 2004 — 100% 24,750 (1) Valdosta Healthcare Facility II Valdosta, GA 11/28/2018 1992 — 100% 12,745 (1) Bryant Healthcare Facility II Little Rock-North Little Rock-Conway, AR 08/16/2019 2016 — 100% 16,425 (1) Laredo Healthcare Facility Laredo, TX 09/19/2019 1998 2023 100% 61,677 (1) Laredo Healthcare Facility II Laredo, TX 09/19/2019 1998 — 100% 118,132 (1) Poplar Bluff Healthcare Facility Poplar Bluff, MO (µSA) 09/19/2019 2013 — 100% 71,519 (1) Tucson Healthcare Facility Tucson, AZ 09/19/2019 1998 — 100% 34,009 (1) Akron Healthcare Facility Akron, OH 10/04/2019 2012 — 100% 98,705 (1) Akron Healthcare Facility II Akron, OH 10/04/2019 2013 — 100% 38,564 (1) Akron Healthcare Facility III Akron, OH 10/04/2019 2008 — 100% 54,000 (1) Alexandria Healthcare Facility Alexandria, LA 10/04/2019 2007 — 100% 15,600 (1) Appleton Healthcare Facility Appleton, WI 10/04/2019 2011 — 100% 7,552 (1) Austin Healthcare Facility II Austin-Round Rock-San Marcos, TX 10/04/2019 2006 — 100% 18,273 (1) Bellevue Healthcare Facility Green Bay, WI 10/04/2019 2010 — 100% 5,838 (1) Bonita Springs Healthcare Facility Cape Coral-Fort Myers, FL 10/04/2019 2002 2005 100% 9,800 — Bridgeton Healthcare Facility St.
Biggest changeWe own fee simple interests in all of our land, buildings and improvements except for 19 properties, for which we own leasehold interests subject to the respective ground leases. 23 Table of Contents Property Statistics The following table shows the property statistics of our real estate portfolio as of December 31, 2024: Property Name MSA/µSA Date Acquired Year Constructed % Leased Leased Sq Ft Encumbrances, $ (in thousands) Houston Healthcare Facility Houston-Pasadena-The Woodlands, TX 07/31/2014 1993 100% 13,645 (1) Cincinnati Healthcare Facility Cincinnati, OH-KY-IN 10/29/2014 2001 100% 14,868 (1) Winston-Salem Healthcare Facility Winston-Salem, NC 12/17/2014 2004 100% 22,200 (1) Stoughton Healthcare Facility Boston-Cambridge-Newton, MA-NH 12/23/2014 1973 —% — — Fort Worth Healthcare Facility Dallas-Fort Worth-Arlington, TX 12/31/2014 2014 100% 83,464 (1) Fort Worth Healthcare Facility II Dallas-Fort Worth-Arlington, TX 12/31/2014 2014 100% 8,268 (1) Winter Haven Healthcare Facility Lakeland-Winter Haven, FL 01/27/2015 2009 100% 7,560 (1) Overland Park Healthcare Facility Kansas City, MO-KS 02/17/2015 2014 100% 54,568 (1) Clarion Healthcare Facility Pittsburgh, PA 06/01/2015 2012 100% 33,000 (1) Webster Healthcare Facility Houston-Pasadena-The Woodlands, TX 06/05/2015 2015 100% 53,514 (1) Augusta Healthcare Facility Augusta-Waterville, ME (µSA) 07/22/2015 2010 100% 51,000 (1) Cincinnati Healthcare Facility III Cincinnati, OH-KY-IN 07/22/2015 2014 100% 41,600 (1) Florence Healthcare Facility Cincinnati, OH-KY-IN 07/22/2015 2014 100% 41,600 (1) Oakland Healthcare Facility Augusta-Waterville, ME (µSA) 07/22/2015 2004 100% 20,000 (1) Wyomissing Healthcare Facility Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 07/24/2015 2007 100% 37,117 (1) Luling Healthcare Facility Austin-Round Rock-San Marcos, TX 07/30/2015 2003 100% 40,901 (1) Omaha Healthcare Facility Omaha, NE-IA 10/14/2015 2014 100% 40,402 (1) Sherman Healthcare Facility Sherman-Denison, TX 11/20/2015 2005 100% 57,576 (1) Sherman Healthcare Facility II Sherman-Denison, TX 11/20/2015 2005 100% 8,055 (1) Fort Worth Healthcare Facility III Dallas-Fort Worth-Arlington, TX 12/23/2015 1998 100% 36,800 (1) Oklahoma City Healthcare Facility Oklahoma City, OK 12/29/2015 1985 100% 94,076 (1) Oklahoma City Healthcare Facility II Oklahoma City, OK 12/29/2015 1994 100% 41,394 (1) Edmond Healthcare Facility Oklahoma City, OK 01/20/2016 2002 100% 17,700 (1) Oklahoma City Healthcare Facility III Oklahoma City, OK 01/27/2016 2006 100% 5,000 (1) Oklahoma City Healthcare Facility IV Oklahoma City, OK 01/27/2016 2007 100% 8,762 (1) Newcastle Healthcare Facility Oklahoma City, OK 02/03/2016 1995 100% 7,424 (1) Oklahoma City Healthcare Facility V Oklahoma City, OK 02/11/2016 2008 100% 43,676 (1) Rancho Mirage Healthcare Facility Riverside-San Bernardino-Ontario, CA 03/01/2016 2018 100% 47,008 (1) Oklahoma City Healthcare Facility VI Oklahoma City, OK 03/07/2016 2007 100% 14,676 (1) Oklahoma City Healthcare Facility VII Oklahoma City, OK 06/22/2016 2016 100% 102,978 (1) Las Vegas Healthcare Facility Las Vegas-Henderson-North Las Vegas, NV 06/24/2016 2017 100% 56,220 (1) Oklahoma City Healthcare Facility VIII Oklahoma City, OK 06/30/2016 1997 100% 62,857 (1) Marlton Healthcare Facility Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 11/01/2016 1995 100% 89,139 (1) Grand Rapids Healthcare Facility Grand Rapids-Wyoming-Kentwood, MI 12/07/2016 2008 80% 86,513 (1) Corpus Christi Healthcare Facility Corpus Christi, TX 12/22/2016 1992 100% 25,102 (1) Aurora Healthcare Facility Chicago-Naperville-Elgin, IL-IN 03/30/2017 2002 100% 24,722 (1) Allen Healthcare Facility Dallas-Fort Worth-Arlington, TX 03/31/2017 2007 100% 42,627 (1) Austin Healthcare Facility Austin-Round Rock-San Marcos, TX 03/31/2017 2012 100% 66,095 (1) Beaumont Healthcare Facility Beaumont-Port Arthur, TX 03/31/2017 1991 100% 61,000 (1) San Antonio Healthcare Facility San Antonio-New Braunfels, TX 06/29/2017 1984 100% 44,746 (1) Silverdale Healthcare Facility Bremerton-Silverdale-Port Orchard, WA 08/25/2017 2005 100% 26,127 (1) Silverdale Healthcare Facility II Bremerton-Silverdale-Port Orchard, WA 09/20/2017 2007 100% 19,184 (1) Saginaw Healthcare Facility Saginaw, MI 12/21/2017 2002 100% 87,843 (1) Carrollton Healthcare Facility Dallas-Fort Worth-Arlington, TX 04/27/2018 2015 100% 21,990 (1) Katy Healthcare Facility Houston-Pasadena-The Woodlands, TX 06/08/2018 2015 100% 34,296 (1) Indianola Healthcare Facility Des Moines-West Des Moines, IA 09/26/2018 2014 100% 18,116 (1) Indianola Healthcare Facility II Des Moines-West Des Moines, IA 09/26/2018 2011 100% 20,990 (1) Benton Healthcare Facility Little Rock-North Little Rock-Conway, AR 10/17/2018 1992/1999 100% 104,419 (1) Benton Healthcare Facility II Little Rock-North Little Rock-Conway, AR 10/17/2018 1983 100% 11,350 (1) Bryant Healthcare Facility Little Rock-North Little Rock-Conway, AR 10/17/2018 1995 100% 23,450 (1) Hot Springs Healthcare Facility Little Rock-North Little Rock-Conway, AR 10/17/2018 2009 100% 8,573 (1) Clive Healthcare Facility Des Moines-West Des Moines, IA 11/26/2018 2008 100% 58,156 (1) Valdosta Healthcare Facility Valdosta, GA 11/28/2018 2004 100% 24,750 (1) Valdosta Healthcare Facility II Valdosta, GA 11/28/2018 1992 100% 12,745 (1) 24 Table of Contents Property Name MSA/µSA Date Acquired Year Constructed % Leased Leased Sq Ft Encumbrances, $ (in thousands) Bryant Healthcare Facility II Little Rock-North Little Rock-Conway, AR 08/16/2019 2016 100% 16,425 (1) Laredo Healthcare Facility Laredo, TX 09/19/2019 1998 100% 61,677 (1) Laredo Healthcare Facility II Laredo, TX 09/19/2019 1998 100% 118,132 (1) Poplar Bluff Healthcare Facility Poplar Bluff, MO (µSA) 09/19/2019 2013 100% 71,519 (1) Tucson Healthcare Facility Tucson, AZ 09/19/2019 1998 100% 34,009 (1) Akron Healthcare Facility Akron, OH 10/04/2019 2012 100% 98,705 (1) Akron Healthcare Facility II Akron, OH 10/04/2019 2013 100% 38,564 (1) Akron Healthcare Facility III Akron, OH 10/04/2019 2008 100% 54,000 (1) Alexandria Healthcare Facility Alexandria, LA 10/04/2019 2007 100% 15,600 (1) Appleton Healthcare Facility Appleton, WI 10/04/2019 2011 100% 7,552 (1) Austin Healthcare Facility II Austin-Round Rock-San Marcos, TX 10/04/2019 2006 100% 18,273 (1) Bellevue Healthcare Facility Green Bay, WI 10/04/2019 2010 100% 5,838 (1) Bonita Springs Healthcare Facility Cape Coral-Fort Myers, FL 10/04/2019 2002 100% 9,800 — Bridgeton Healthcare Facility St.
Petersburg-Clearwater, FL 09/08/2020 2015 — 100% 33,822 (1) Tucson Healthcare Facility IV Tucson, AZ 12/22/2020 2022 — 100% 44,692 (1) Greenwood Healthcare Facility Indianapolis-Carmel-Greenwood, IN 04/19/2021 2008 2018 100% 53,560 (1) Clive Healthcare Facility II Des Moines-West Des Moines, IA 12/08/2021 2008 — 100% 63,224 (1) Clive Healthcare Facility III Des Moines-West Des Moines, IA 12/08/2021 2008 — 100% 33,974 (1) Clive Healthcare Facility IV Des Moines-West Des Moines, IA 12/08/2021 2009 2018 100% 35,419 (1) Clive Undeveloped Land Des Moines-West Des Moines, IA 12/08/2021 — — —% — — Clive Undeveloped Land II Des Moines-West Des Moines, IA 12/08/2021 — — —% — — Yukon Healthcare Facility Oklahoma City, OK 03/10/2022 2020 — 100% 45,624 (1) Pleasant Hills Healthcare Facility Pittsburgh, PA 05/12/2022 2015 — 100% 33,712 (1) Prosser Healthcare Facility I Kennewick-Richland, WA 05/20/2022 2020 — 100% 6,000 (1) Prosser Healthcare Facility II Kennewick-Richland, WA 05/20/2022 2013 2019 100% 9,230 (1) Prosser Healthcare Facility III Kennewick-Richland, WA 05/20/2022 2013 — 100% 5,400 (1) Tampa Healthcare Facility II Tampa-St.
Petersburg-Clearwater, FL 09/08/2020 2015 100% 33,822 (1) Tucson Healthcare Facility IV Tucson, AZ 12/22/2020 2022 100% 44,692 (1) Greenwood Healthcare Facility Indianapolis-Carmel-Greenwood, IN 04/19/2021 2008 100% 53,560 (1) Clive Healthcare Facility II Des Moines-West Des Moines, IA 12/08/2021 2008 100% 63,224 (1) Clive Healthcare Facility III Des Moines-West Des Moines, IA 12/08/2021 2008 100% 33,974 (1) Clive Healthcare Facility IV Des Moines-West Des Moines, IA 12/08/2021 2009 100% 35,419 (1) Clive Undeveloped Land Des Moines-West Des Moines, IA 12/08/2021 — —% — — Clive Undeveloped Land II Des Moines-West Des Moines, IA 12/08/2021 — —% — — Yukon Healthcare Facility Oklahoma City, OK 03/10/2022 2020 100% 45,624 (1) Pleasant Hills Healthcare Facility Pittsburgh, PA 05/12/2022 2015 100% 33,712 (1) Prosser Healthcare Facility I Kennewick-Richland, WA 05/20/2022 2020 100% 6,000 (1) Prosser Healthcare Facility II Kennewick-Richland, WA 05/20/2022 2013 100% 9,230 (1) Prosser Healthcare Facility III Kennewick-Richland, WA 05/20/2022 2013 100% 5,400 (1) Tampa Healthcare Facility II Tampa-St.
Louis, MO-IL 10/04/2019 2012 — 100% 66,914 (1) Covington Healthcare Facility New Orleans-Metairie, LA 10/04/2019 1984 — 100% 43,250 (1) Crestview Healthcare Facility Crestview-Fort Walton Beach-Destin, FL 10/04/2019 2004 2010 100% 5,685 — Dallas Healthcare Facility Dallas-Fort Worth-Arlington, TX 10/04/2019 2011 — 100% 62,390 (1) De Pere Healthcare Facility Green Bay, WI 10/04/2019 2005 — 100% 7,100 (1) Denver Healthcare Facility Denver-Aurora-Centennial, CO 10/04/2019 1962 2018 100% 131,210 (1) El Segundo Healthcare Facility Los Angeles-Long Beach-Anaheim, CA 10/04/2019 2009 — 100% 12,163 — Fairlea Healthcare Facility Hagerstown-Martinsburg, MD-WV 10/04/2019 1999 — 100% 5,200 — Fayetteville Healthcare Facility Fayetteville-Springdale-Rogers, AR 10/04/2019 1994 2009 100% 55,740 (1) Fort Myers Healthcare Facility Cape Coral-Fort Myers, FL 10/04/2019 1999 — 100% 32,148 — Fort Myers Healthcare Facility II Cape Coral-Fort Myers, FL 10/04/2019 2010 2022 100% 47,089 — Fort Walton Beach Healthcare Facility Crestview-Fort Walton Beach-Destin, FL 10/04/2019 2005 — 100% 9,017 — Frankfort Healthcare Facility Lexington-Fayette, KY 10/04/2019 1993 2019 100% 4,000 — Frisco Healthcare Facility Dallas-Fort Worth-Arlington, TX 10/04/2019 2010 2020 100% 57,051 (1) Goshen Healthcare Facility Elkhart-Goshen, IN 10/04/2019 2010 — 100% 15,462 (1) Hammond Healthcare Facility Hammond, LA 10/04/2019 2006 — 100% 63,000 (1) Hammond Healthcare Facility II Hammond, LA 10/04/2019 2004 — 100% 23,835 (1) Henderson Healthcare Facility Las Vegas-Henderson-North Las Vegas, NV 10/04/2019 2000 — 100% 6,685 — Houston Healthcare Facility III Houston-Pasadena-The Woodlands, TX 10/04/2019 1998 2018 100% 16,217 (1) Howard Healthcare Facility Green Bay, WI 10/04/2019 2011 — 100% 7,552 (1) Jacksonville Healthcare Facility Jacksonville, FL 10/04/2019 2009 — 100% 13,082 — Lafayette Healthcare Facility Lafayette, LA 10/04/2019 2004 2005 100% 73,824 (1) Lakewood Ranch Healthcare Facility North Port-Bradenton-Sarasota, FL 10/04/2019 2008 — 100% 10,919 — Las Vegas Healthcare Facility II Las Vegas-Henderson-North Las Vegas, NV 10/04/2019 2007 — 100% 6,963 — Lehigh Acres Healthcare Facility Cape Coral-Fort Myers, FL 10/04/2019 2002 — 100% 5,746 — Lubbock Healthcare Facility Lubbock, TX 10/04/2019 2003 — 100% 102,143 (1) Manitowoc Healthcare Facility Green Bay, WI 10/04/2019 2003 — 100% 7,987 (1) Manitowoc Healthcare Facility II Green Bay, WI 10/04/2019 1964 2010 100% 36,090 (1) Marinette Healthcare Facility Green Bay, WI 10/04/2019 2008 — 100% 4,178 (1) 22 Table of Contents Property Name MSA/µSA Date Acquired Year Constructed Year Renovated % Leased Leased Sq Ft Encumbrances, $ (in thousands) New Bedford Healthcare Facility Providence-Warwick, RI-MA 10/04/2019 1942 1995 100% 70,657 — New Braunfels Healthcare Facility San Antonio-New Braunfels, TX 10/04/2019 2007 — 100% 27,971 (1) North Smithfield Healthcare Facility Providence-Warwick, RI-MA 10/04/2019 1965 2000 100% 92,944 (1) Oklahoma City Healthcare Facility IX Oklahoma City, OK 10/04/2019 2007 — 100% 34,970 (1) Oshkosh Healthcare Facility Oshkosh-Neenah, WI 10/04/2019 2010 — 100% 8,717 (1) Palm Desert Healthcare Facility Riverside-San Bernardino-Ontario, CA 10/04/2019 2005 — 100% 6,963 — Rancho Mirage Healthcare Facility II Riverside-San Bernardino-Ontario, CA 10/04/2019 2008 2022 100% 7,432 — San Antonio Healthcare Facility III San Antonio-New Braunfels, TX 10/04/2019 2012 — 100% 50,000 (1) San Antonio Healthcare Facility IV San Antonio-New Braunfels, TX 10/04/2019 1987 — 100% 113,136 (1) San Antonio Healthcare Facility V San Antonio-New Braunfels, TX 10/04/2019 2017 — 81% 47,091 (1) Santa Rosa Beach Healthcare Facility Crestview-Fort Walton Beach-Destin, FL 10/04/2019 2003 — 100% 5,000 — Savannah Healthcare Facility Savannah, GA 10/04/2019 2014 — 100% 48,184 — Sturgeon Bay Healthcare Facility Green Bay, WI 10/04/2019 2007 — 100% 3,100 (1) Victoria Healthcare Facility Victoria, TX 10/04/2019 2013 — 100% 34,297 (1) Victoria Healthcare Facility II Victoria, TX 10/04/2019 1998 — 100% 28,752 (1) Wilkes-Barre Healthcare Facility Scranton–Wilkes-Barre, PA 10/04/2019 2012 — 100% 15,996 (1) Yucca Valley Healthcare Facility Riverside-San Bernardino-Ontario, CA 10/04/2019 2009 — 100% 12,240 — Tucson Healthcare Facility II Tucson, AZ 12/26/2019 2021 — 100% 60,913 (1) Tucson Healthcare Facility III Tucson, AZ 12/27/2019 2020 — 100% 20,000 (1) Grimes Healthcare Facility Des Moines-West Des Moines, IA 02/19/2020 2018 — 100% 14,669 (1) Tampa Healthcare Facility Tampa-St.
Louis, MO-IL 10/04/2019 2012 100% 66,914 (1) Covington Healthcare Facility New Orleans-Metairie, LA 10/04/2019 1984 100% 43,250 (1) Crestview Healthcare Facility Crestview-Fort Walton Beach-Destin, FL 10/04/2019 2004 100% 5,685 — Dallas Healthcare Facility Dallas-Fort Worth-Arlington, TX 10/04/2019 2011 100% 62,390 (1) De Pere Healthcare Facility Green Bay, WI 10/04/2019 2005 100% 7,100 (1) Denver Healthcare Facility Denver-Aurora-Centennial, CO 10/04/2019 1962 100% 131,210 (1) El Segundo Healthcare Facility Los Angeles-Long Beach-Anaheim, CA 10/04/2019 2009 100% 12,163 — Fairlea Healthcare Facility Hagerstown-Martinsburg, MD-WV 10/04/2019 1999 100% 5,200 — Fayetteville Healthcare Facility Fayetteville-Springdale-Rogers, AR 10/04/2019 1994 100% 55,740 (1) Fort Walton Beach Healthcare Facility Crestview-Fort Walton Beach-Destin, FL 10/04/2019 2005 100% 9,017 — Frankfort Healthcare Facility Lexington-Fayette, KY 10/04/2019 1993 100% 4,000 — Frisco Healthcare Facility Dallas-Fort Worth-Arlington, TX 10/04/2019 2010 100% 57,051 (1) Goshen Healthcare Facility Elkhart-Goshen, IN 10/04/2019 2010 100% 15,462 (1) Hammond Healthcare Facility Hammond, LA 10/04/2019 2006 100% 63,000 (1) Hammond Healthcare Facility II Hammond, LA 10/04/2019 2004 100% 23,835 (1) Henderson Healthcare Facility Las Vegas-Henderson-North Las Vegas, NV 10/04/2019 2000 100% 6,685 — Houston Healthcare Facility III Houston-Pasadena-The Woodlands, TX 10/04/2019 1998 100% 16,217 (1) Howard Healthcare Facility Green Bay, WI 10/04/2019 2011 100% 7,552 (1) Jacksonville Healthcare Facility Jacksonville, FL 10/04/2019 2009 100% 13,082 — Lafayette Healthcare Facility Lafayette, LA 10/04/2019 2004 100% 73,824 (1) Lakewood Ranch Healthcare Facility North Port-Bradenton-Sarasota, FL 10/04/2019 2008 100% 10,919 — Las Vegas Healthcare Facility II Las Vegas-Henderson-North Las Vegas, NV 10/04/2019 2007 100% 6,963 — Lehigh Acres Healthcare Facility Cape Coral-Fort Myers, FL 10/04/2019 2002 100% 5,746 — Lubbock Healthcare Facility Lubbock, TX 10/04/2019 2003 100% 102,143 (1) Manitowoc Healthcare Facility Green Bay, WI 10/04/2019 2003 100% 7,987 (1) Manitowoc Healthcare Facility II Green Bay, WI 10/04/2019 1964 100% 36,090 (1) Marinette Healthcare Facility Green Bay, WI 10/04/2019 2008 100% 4,178 (1) New Braunfels Healthcare Facility San Antonio-New Braunfels, TX 10/04/2019 2007 100% 27,971 (1) North Smithfield Healthcare Facility Providence-Warwick, RI-MA 10/04/2019 1965 100% 92,944 (1) Oklahoma City Healthcare Facility IX Oklahoma City, OK 10/04/2019 2007 100% 34,970 (1) Oshkosh Healthcare Facility Oshkosh-Neenah, WI 10/04/2019 2010 100% 8,717 (1) Palm Desert Healthcare Facility Riverside-San Bernardino-Ontario, CA 10/04/2019 2005 100% 6,963 — Rancho Mirage Healthcare Facility II Riverside-San Bernardino-Ontario, CA 10/04/2019 2008 100% 7,432 — San Antonio Healthcare Facility III San Antonio-New Braunfels, TX 10/04/2019 2012 100% 50,000 (1) San Antonio Healthcare Facility IV San Antonio-New Braunfels, TX 10/04/2019 1987 100% 113,136 (1) San Antonio Healthcare Facility V San Antonio-New Braunfels, TX 10/04/2019 2017 81% 47,091 (1) Santa Rosa Beach Healthcare Facility Crestview-Fort Walton Beach-Destin, FL 10/04/2019 2003 100% 5,000 — Savannah Healthcare Facility Savannah, GA 10/04/2019 2014 100% 48,184 — Sturgeon Bay Healthcare Facility Green Bay, WI 10/04/2019 2007 100% 3,100 (1) Victoria Healthcare Facility Victoria, TX 10/04/2019 2013 100% 34,297 (1) Victoria Healthcare Facility II Victoria, TX 10/04/2019 1998 100% 28,752 (1) Wilkes-Barre Healthcare Facility Scranton–Wilkes-Barre, PA 10/04/2019 2012 100% 15,996 (1) Tucson Healthcare Facility II Tucson, AZ 12/26/2019 2021 100% 60,913 (1) Tucson Healthcare Facility III Tucson, AZ 12/27/2019 2020 100% 20,000 (1) Grimes Healthcare Facility Des Moines-West Des Moines, IA 02/19/2020 2018 100% 14,669 (1) 25 Table of Contents Property Name MSA/µSA Date Acquired Year Constructed % Leased Leased Sq Ft Encumbrances, $ (in thousands) Tampa Healthcare Facility Tampa-St.
Item 2. Properties. Our principal executive office is located at 1001 Water Street, Suite 800, Tampa, Florida 33602. As of December 31, 2023, we owned a portfolio of 131 real estate properties, composed of approximately 5,114,000 rentable square feet of commercial spaces, and two undeveloped land parcels.
Item 2. Properties. Our principal executive office is located at 1001 Water Street, Suite 800, Tampa, Florida 33602. As of December 31, 2024, we owned a portfolio of 135 real estate properties, composed of approximately 5,263,000 rentable square feet of commercial spaces, and two undeveloped land parcels.
Real estate assets, other than land, are depreciated on a straight-line basis over each asset's useful life. Tenant improvements are depreciated on a straight-line basis over the shorter of the respective lease term or expected useful life. 23 Table of Contents Leases As of December 31, 2023, the weighted average remaining lease term of our properties was 8.5 years.
Real estate assets, other than land, are depreciated on a straight-line basis over each asset's useful life. Tenant improvements are depreciated on a straight-line basis over the shorter of the respective lease term or expected useful life. 26 Table of Contents Leases As of December 31, 2024, the weighted average remaining lease term of our properties was 9.7 years.
As of December 31, 2023, 111 commercial real estate properties were contributed to the pool of unencumbered properties under our credit facility and we had an outstanding principal balance of $525,000,000. (2) Property is currently under renovation. We believe the properties are adequately covered by insurance and are suitable for their respective intended purposes.
As of December 31, 2024, 112 commercial real estate properties were contributed to the pool of unencumbered properties under our credit facility and we had an outstanding principal balance of $525,000,000. We believe the properties are adequately covered by insurance and are suitable for their respective intended purposes.
As of December 31, 2023, 117 of our real estate properties were leased to a single-tenant and 14 of our real estate properties were leased to multiple tenants. As of December 31, 2023, 99.4% of our rentable square feet was leased, with a weighted average remaining lease term of 8.5 years.
As of December 31, 2024, 120 of our real estate properties were leased to a single-tenant, 14 of our real estate properties were leased to multiple tenants, and one of our real estate properties was vacant. As of December 31, 2024, 96.0% of our rentable square feet was leased, with a weighted average remaining lease term of 9.7 years.
Petersburg-Clearwater, FL 07/20/2022 2022 — 100% 87,649 (1) Escondido Healthcare Facility San Diego-Carlsbad, CA 07/21/2022 2021 — 100% 56,800 (1) West Palm Beach Healthcare Facility Miami-Fort Lauderdale-West Palm Beach, FL 06/15/2023 1999 2007/2019 100% 25,150 (1) Burr Ridge Healthcare Facility Chicago-Naperville-Elgin, IL-IN 09/27/2023 2010 — 100% 104,912 — 5,085,257 — (1) Property is contributed to the pool of unencumbered properties of our credit facility.
Petersburg-Clearwater, FL 07/20/2022 2022 100% 87,649 (1) Escondido Healthcare Facility San Diego-Carlsbad, CA 07/21/2022 2021 100% 56,800 (1) West Palm Beach Healthcare Facility Miami-Fort Lauderdale-West Palm Beach, FL 06/15/2023 1999 100% 25,150 (1) Burr Ridge Healthcare Facility Chicago-Naperville-Elgin, IL-IN 09/27/2023 2010 100% 104,912 (1) Brownsburg Healthcare Facility Indianapolis-Carmel-Greenwood, IN 02/26/2024 2023 100% 55,986 (1) Cave Creek Healthcare Facility Phoenix-Mesa-Chandler, AZ 03/20/2024 2021 100% 32,450 — Marana Healthcare Facility Tucson, AZ 03/20/2024 2020 100% 32,250 — Surprise Healthcare Facility Phoenix-Mesa-Chandler, AZ 03/20/2024 2020 100% 32,450 — Tucson Healthcare Facility V Tucson, AZ 03/20/2024 2020 100% 32,450 — Weslaco Healthcare Facility McAllen-Edinburg-Mission, TX 03/20/2024 2019 100% 28,750 — Reading Healthcare Facility Reading, PA 05/21/2024 2020 100% 30,000 — Fort Smith Healthcare Facility Fort Smith, AR-OK 07/25/2024 2021 100% 62,570 — 5,049,548 — (1) Property is contributed to the pool of unencumbered properties of our credit facility.
Lease expirations of our real properties based on annualized contractual base rent as of December 31, 2023, for each of the next ten years ending December 31 and thereafter, are as follows: Year of Lease Expiration Total Number of Leases Leased Sq Ft Annualized Contractual Base Rent (in thousands) (1) Percentage of Annualized Contractual Base Rent 2024 18 143,230 $ 4,432 2.7 % 2025 12 246,413 7,768 4.8 % 2026 13 202,884 5,977 3.7 % 2027 9 277,229 7,107 4.4 % 2028 11 238,571 5,301 3.3 % 2029 19 520,887 11,239 7.0 % 2030 14 553,432 18,635 11.5 % 2031 12 497,414 20,412 12.6 % 2032 6 175,658 7,188 4.5 % 2033 12 478,568 20,744 12.8 % Thereafter 32 1,750,971 52,642 32.7 % 158 5,085,257 $ 161,445 100.0 % (1) Annualized contractual base rent is based on leases in effect as of December 31, 2023.
Lease expirations of our real properties based on annualized contractual base rent as of December 31, 2024, for each of the next ten years ending December 31 and thereafter, are as follows: Year of Lease Expiration Total Number of Leases Leased Sq Ft Annualized Contractual Base Rent (in thousands) (1) Percentage of Annualized Contractual Base Rent 2025 12 116,005 $ 3,606 2.2 % 2026 15 215,779 6,407 3.9 % 2027 10 279,909 7,337 4.4 % 2028 12 240,631 5,440 3.3 % 2029 25 425,082 10,802 6.5 % 2030 12 479,314 15,929 9.6 % 2031 14 510,352 21,094 12.8 % 2032 6 175,658 7,348 4.4 % 2033 14 312,706 13,815 8.4 % 2034 7 380,447 8,661 5.2 % Thereafter 42 1,913,665 64,791 39.3 % 169 5,049,548 $ 165,230 100.0 % (1) Annualized contractual base rent is based on leases in effect as of December 31, 2024.
Added
As of December 31, 2024, all of our real estate investments are in healthcare properties aside from two undeveloped land parcels.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 24 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 24 Item 6. [Reserved] 28 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 38
Biggest changeItem 4. Mine Safety Disclosures 27 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 27 Item 6. [Reserved] 30 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 43

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+22 added−55 removed0 unchanged
Biggest changeDuring the three months ended December 31, 2023, we fulfilled the following repurchase requests pursuant to our SRP: Period Total Number of Shares Repurchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans and Programs Approximate Dollar Value of Shares Available that may yet be Repurchased under the Program October 1, 2023 - October 31, 2023 368,926 $ 8.13 — $ — November 1, 2023 - November 30, 2023 — $ — — $ — December 1, 2023 - December 31, 2023 — $ — — $ — Total 368,926 — During the three months ended December 31, 2023, we repurchased approximately $2,998,000 of Class A shares, Class I shares and Class T shares of common stock.
Biggest changeDuring the year ended December 31, 2024, we redeemed 210,683 shares under the Terminated SRP. 28 Table of Contents During the three months ended December 31, 2024, we repurchased shares of our Common Stock as follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs (1) October 1, 2024 - October 31, 2024 — $ — — $ 25,000,000 November 1, 2024 - November 30, 2024 1,002 (2) $ 24.68 — $ 25,000,000 December 1, 2024 - December 31, 2024 36,701 (2) $ 24.32 — $ 25,000,000 Total 37,703 $ 24.33 — (1) Represents the gross purchase proceeds that may be repurchased pursuant to the Share Repurchase Program (announced on August 19, 2024), for a period of 12 months from August 16, 2024.
Unregistered Sales of Equity Securities There were no unregistered sales of equity securities during the quarter ended December 31, 2023.
Unregistered Sales of Equity Securities There were no unregistered sales of equity securities during the quarter ended December 31, 2024.
As a REIT, we make distributions each taxable year equal to at least 90% of our REIT taxable income (computed without regard to the dividends paid deduction and excluding capital gains). One of our primary goals is to continue to pay monthly distributions to our stockholders.
As a REIT, we make distributions each taxable year equal to at least 90% of our REIT taxable income (computed without regard to the dividends paid deduction and excluding capital gains).
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information There is no established public trading market for our common stock. Therefore, a stockholder may not be able to sell our stock at a time or price acceptable to the stockholder, or at all.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information On June 13, 2024, our Common Stock began trading on the NYSE, under the ticker symbol "SILA". Prior to that time, there was no public market for the shares of our Common Stock.
Item 6. [Reserved] Information pertaining to Item 6 is not presented in accordance with amendments to Item 301 of Regulation S-K. 28 Table of Contents
Period Ending Index 06/13/2024 12/31/2024 Sila Realty Trust, Inc. $ 100.00 $ 110.76 S&P 500 $ 100.00 $ 109.04 MSCI US REIT Index $ 100.00 $ 110.61 Item 6. [Reserved] Information pertaining to Item 6 is not presented in accordance with amendments to Item 301 of Regulation S-K. 30 Table of Contents
Removed
Unless and until our shares are listed on a national securities exchange, we do not expect that a public market for the shares will develop.
Added
As of February 24, 2025, we had 10,024 stockholders of record.
Removed
As of December 31, 2023, the offering price for the shares in the DRIP Offering was $7.48 per Class A share, $7.48 per Class I share and $7.48 per Class T share, which is equal to the Estimated Per Share NAV, as approved by the Board and effective on December 18, 2023.
Added
Reverse Stock Split On April 8, 2024, in anticipation of the Listing, we amended our charter to effect a one-for-four reverse stock split of each issued and outstanding share of each class of our Common Stock, effective May 1, 2024, and we also amended our charter to decrease the par value of each issued and outstanding share of our Common Stock from $0.04 par value per share to $0.01 par value per share immediately after the Reverse Stock Split.
Removed
We will continue to issue shares of Class A common stock, Class I common stock and Class T common stock under the current DRIP Offering until such time as we sell all of the shares registered for sale under the current DRIP Offering, unless we file a new registration statement with the SEC or the current DRIP Offering is terminated by the Board.
Added
In addition, equitable adjustments were made to the maximum number of shares of our Common Stock that may be issued pursuant to the A&R Incentive Plan to reflect the Reverse Stock Split. The number of shares of our Common Stock subject to outstanding awards under the A&R Incentive Plan were also equitably adjusted to reflect the Reverse Stock Split.
Removed
We will issue such shares at the applicable Estimated Per Share NAV. As of May 2022, all outstanding shares of Class T2 common stock (including associated shares of Class T2 DRIP common stock) were converted into shares of Class I common stock.
Added
The Reverse Stock Split affected all record holders of our Common Stock uniformly and did not affect any record holder’s percentage ownership interest. The Reverse Stock Split did not affect the number of our authorized shares of Common Stock.
Removed
Stockholders received a confirmation notice when their shares of Class T2 common stock were converted into shares of Class I common stock. 24 Table of Contents Pursuant to the terms of our charter, certain restrictions are imposed on the ownership and transfer of shares.
Added
All references made to share or per share amounts in the accompanying 27 Table of Contents consolidated financial statements and applicable disclosures have been retroactively adjusted as though the Reverse Stock Split had been effectuated prior to all periods presented. DRIP Offering The DRIP was terminated effective May 1, 2024 in connection with the Listing.
Removed
To assist the FINRA members and their associated persons that participated in our public offerings of common stock, pursuant to FINRA Rule 5110 and NASD Conduct Rule 2340, we disclose in each annual report distributed to stockholders a per share estimated value of the shares, the method by which it was developed, and the date of the data used to develop the estimated value.
Added
During the year ended December 31, 2024, we issued 333,402 shares pursuant to the DRIP, prior to the termination. Distributions We are taxed and qualify as a REIT for federal income tax purposes.
Removed
In addition, we prepare annual statements of estimated share values to assist fiduciaries of retirement plans subject to the annual reporting requirements of ERISA in the preparation of their reports relating to an investment in our shares. For these purposes, the Estimated Per Share NAV of our common shares was $7.48 as of December 31, 2023.
Added
One of our primary goals is to continue to pay distributions to our stockholders, which will be paid quarterly effective in 2025 (as disclosed in the Current Report on Form 8-K that we filed with the SEC on October 18, 2024).
Removed
However, as set forth above, there is no public trading market for the shares at this time and stockholders may not receive $7.48 per share if a market did exist. The Estimated Per Share NAV was approved by the Board, at the recommendation of the Audit Committee, on December 18, 2023, using a methodology that conformed to standard industry practice.
Added
On February 25, 2025, the Board approved and authorized a quarterly cash dividend of $0.40 per share of Common Stock payable on March 26, 2025, to our stockholders of record as of the close of business on March 12, 2025. The quarterly cash dividend of $0.40 per share represents an annualized amount of $1.60 per share.
Removed
In determining the Estimated Per Share NAV, the Board considered information and analyses, including valuation materials that were provided by Cushman & Wakefield of Pennsylvania, LLC, information provided by us and the recommendation of the Audit Committee.
Added
Share Repurchases "Dutch Auction" Tender Offer On June 13, 2024, in conjunction with the Listing, we commenced the Tender Offer to purchase shares of our Common Stock for cash at a price per share of not greater than $24.00 nor less than $22.60, net to the seller in cash, less any applicable withholding taxes and without interest, for a maximum aggregate purchase price of no more than $50,000,000.
Removed
See our Current Report on Form 8-K filed with the SEC on December 19, 2023 for additional information regarding Cushman & Wakefield of Pennsylvania, LLC, and its valuation materials and the methodology used to determine the Estimated Per Share NAV. Stockholder Information As of February 29, 2024, we had 63,474 stockholders of record.
Added
The Tender Offer expired on July 19, 2024.
Removed
The number of stockholders is based on the records of Computershare Trust Company, N.A., who serves as our registrar and transfer agent. Distributions We are taxed and qualify as a REIT for federal income tax purposes.
Added
As a result of the Tender Offer, we accepted for purchase 2,212,389 shares of Common Stock (which represented approximately 3.9% of the total number of shares of Common Stock outstanding as of July 19, 2024) at a purchase price of $22.60 per share, for an aggregate purchase price of approximately $50,000,000, excluding all related costs and fees.
Removed
Share Repurchase Program Prior to the time that our shares are listed on a national securities exchange, if ever, our Amended and Restated Share Repurchase Program, or the SRP, as described below, may provide eligible stockholders with limited, interim liquidity by enabling them to sell shares back to us, subject to restrictions and applicable law.
Added
We incurred $2,093,000 of costs and fees related to the Tender Offer which are recorded as a reduction in equity on the accompanying consolidated financial statements. We funded the Tender Offer and related costs and fees with our available cash.
Removed
We are not obligated to repurchase shares under our SRP. We currently only repurchase shares due to death and involuntary exigent circumstances in accordance with our SRP, subject in each case to the terms and limitations of the SRP, including, but not limited to, quarterly share limitations, an annual 5.0% share limitation, and DRIP funding limitations.
Added
Share Repurchase Program On August 16, 2024, the Board authorized a share repurchase program of up to the lesser of 1,500,000 shares of our outstanding Common Stock, or $25,000,000 in gross purchase proceeds for a period of 12 months from August 16, 2024, or the Share Repurchase Program.
Removed
Under our SRP, we may waive certain of the terms and requirements of the SRP in the event of the death of a stockholder who is a natural person, including shares held through an Individual Retirement Account, or IRA, or other retirement or profit-sharing plan, and certain trusts meeting the requirements of the SRP.
Added
Repurchases of Common Stock under the Share Repurchase Program may be made from time to time in the open market, in privately negotiated purchases, in accelerated share repurchase programs or by any other lawful means.
Removed
We may also waive certain of the terms and requirements of the SRP in the event of an involuntary exigent circumstance, as determined by us or any of the executive officers thereof, in our or their sole discretion. Holding Period.
Added
The number of shares of Common Stock purchased and the timing of any purchases will depend on a number of factors, including the price and availability of Common Stock and general market conditions. No shares were repurchased under the Share Repurchase Program during the year ended December 31, 2024.
Removed
Generally, a stockholder must have beneficially held its Class A shares, Class I shares or Class T shares, as applicable, for at least one year prior to offering them for sale to us through our share repurchase program. A stockholder or a stockholder’s fiduciary, heir or beneficiary may present to us fewer than all of the shares owned for repurchase.
Added
Terminated Share Repurchase Program Prior to the Listing, we had adopted an Amended and Restated Share Repurchase Program, or the Terminated SRP, that allowed for repurchases of shares of our Common Stock upon meeting certain criteria.
Removed
Distribution Reinvestment Plan. In the event that we repurchase all of one stockholder’s shares, any shares that the stockholder purchased pursuant to our DRIP, will be excluded from the one-year holding requirement.
Added
Pursuant to the terms of the Terminated SRP, we were permitted to redeem no more than 5% of the number of shares of our Common Stock outstanding on December 31st of the previous calendar year, and we would redeem shares at a price equal to the most recently published net asset value per share.
Removed
In the event that a stockholder requests a repurchase of its shares, and such stockholder is participating in the DRIP, the stockholder will be deemed to have notified us, at the time the stockholder submits the repurchase request, that the stockholder is terminating participation in the DRIP and has elected to receive future distributions in cash.
Added
We had discretion as to the timing of our repurchases, but they were generally done quarterly. On April 5, 2024, the Board approved the suspension of the Terminated SRP, effective immediately, and the termination of the Terminated SRP, effective upon the Listing.
Removed
This election for cash distributions will continue in effect even if less than all of the stockholder’s shares are accepted for repurchase unless the stockholder notifies us that the stockholder wishes to re-enroll to participate in the DRIP. Death of a Stockholder.
Added
We did not repurchase any shares under the Share Repurchase Program during the three months ended December 31, 2024. Therefore, as of December 31, 2024, up to $25,000,000 of our Common Stock remained available for repurchase under the Share Repurchase Program.
Removed
Subject to the conditions and limitations described below, we may waive certain of the terms and requirements of our share repurchase program in the event of the death of a stockholder who is a natural person, including shares held by such stockholder through an IRA or other retirement or profit-sharing plan, and certain trusts meeting the 25 Table of Contents requirements detailed in this program.
Added
(2) Consists of shares of Common Stock repurchased for the net settlement of withholding taxes in connection with the vesting of restricted stock. 29 Table of Contents Performance Graph The information below shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, other than as provided in Item 201 of Regulation S-K, or to the liabilities of Section 18 of the Exchange Act, except to the extent we specifically request that such information be treated as soliciting material or specifically incorporate it by reference into a filing under the Securities Act or the Exchange Act.
Removed
With regard to trusts, the right to request a repurchase upon death applies upon the death of the settlor of a trust that holds shares, if the trust becomes irrevocable upon the death of the settlor or settlor’s spouse, or the spouse of a settlor of a trust, if the trust became irrevocable upon the death of the settlor and the settlor’s spouse was the beneficiary of the trust, as applicable, after receiving written notice from the fiduciary appointed for the stockholder’s estate, the recipient of the shares through bequest or inheritance, or, in the case of a trust that becomes irrevocable upon the death of the settlor (or previously became irrevocable upon the death of the settlor’s spouse), the then-serving trustee of such trust, who shall be the sole person authorized to request the repurchase on behalf of the trust.
Added
The following graph compares the total cumulative stockholder return, assuming reinvestment of dividends, of our Common Stock to the Standard & Poor's 500 Composite Stock Index, or the S&P 500, and the MSCI US REIT Index for the period beginning June 13, 2024 (the date our Common Stock began trading on the NYSE) and ending December 31, 2024.
Removed
We must receive the written repurchase request within 18 months after the death of the stockholder, the date on which a trust became irrevocable due to death, or the date of death of the settlor’s surviving spouse who was the beneficiary of a trust that became irrevocable due to the death of the settlor, as applicable, in order for the requesting party to rely on any of the special treatment described below that may be afforded in the event of death.
Added
The graph assumes an investment of $100 on June 13, 2024. The historical information set forth on the following performance graph and table below is not necessarily indicative of future stock price performance.
Removed
Such written request must be accompanied by a certified copy of the official death certificate of the stockholder, settlor, and or settlor’s spouse, as applicable.
Removed
In addition, written requests in connection with shares held in a trust must include an executed Certification of Trust for Repurchase form, pursuant to which the trustee must agree to indemnify and hold our company harmless from and against any liability arising from the repurchase.
Removed
If spouses are joint registered holders of the shares, the request to repurchase the shares may be made only if both registered holders are deceased.
Removed
If the stockholder is not a natural person, as in the case of a trust that does not become irrevocable upon the death of the settlor or the settlor’s spouse (as described above in this paragraph), a partnership, a corporation, a limited liability company, or other similar entity, the right of repurchase upon death does not apply. Qualifying Disability.
Removed
Subject to the conditions and limitations described within our SRP, we may waive certain of the terms and requirements of our SRP with respect to shares held by a stockholder, including shares held by such stockholder through an IRA or other retirement or profit-sharing plan, with a “Qualifying Disability” as defined in our SRP, after receiving written notice from such stockholder within 18 months from the date that the stockholder becomes subject to the Qualifying Disability; provided that the condition causing the Qualifying Disability was not pre-existing on the date that the stockholder became a stockholder.
Removed
The Company or any of its executive officers may, in its or their sole discretion, waive certain of the terms and requirements of our SRP with respect to shares held by a stockholder who is a natural person and certifies in an executed Certification Regarding Exigent Circumstances for Repurchase form, that he or she: (a) has been diagnosed with a condition caused by injury, disease, or illness from which there is no reasonable medical probability of recovery and the stockholder’s life expectancy is less than twenty-four (24) months, as evidenced by a physician certification; and (b) is experiencing financial need, such that, if the repurchase request is not granted, the stockholder would be unable to meet the basic financial obligations to support himself/herself and such stockholder’s dependents, which is referred to as an “Involuntary Exigent Circumstance” in our SRP.
Removed
Stockholders requesting repurchases due to Involuntary Exigent Circumstance are required to indemnify and hold the Company harmless from and against any liability arising from the repurchase. Purchase Price.
Removed
The purchase price for shares repurchased under our SRP will be 100% of the most recent estimated NAV per share of the Class A common stock, Class I common stock or Class T common stock, as applicable (in each case, as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock).
Removed
The Board will adjust the estimated NAV per share of each our classes of common stock if we have made one or more special distributions to stockholders. The Board will determine, in its sole discretion, which distributions, if any, constitute a special distribution. Timing of Share Repurchases.
Removed
Repurchases of our shares are at our discretion and generally will be made quarterly upon written request to us by the last day of the applicable quarter.
Removed
Valid repurchase requests will be honored approximately 30 days following the end of the applicable quarter, which we refer to as the “Repurchase Date.” Stockholders may withdraw their repurchase request at any time up to 15 days prior to the Repurchase Date.
Removed
If a repurchase request is granted, we or our agent will send the repurchase amount to each stockholder or heir, beneficiary or estate of a stockholder on or about the Repurchase Date. Repurchase Limitations.
Removed
We will determine whether we have sufficient funds and/or shares available as soon as practicable after the end of each fiscal quarter, but in any event prior to the applicable Repurchase Date. a. 5% Share Limitation.
Removed
During any calendar year, we will not repurchase shares in excess of 5.0% of the number of shares of common stock outstanding on December 31st of the previous calendar year, or the 5% Share Limitation. b. Quarterly Share Limitations.
Removed
We limit the number of shares repurchased each quarter pursuant to our SRP as follows (subject to the DRIP Funding Limitation (as defined below)): • On the first quarter Repurchase Date, which generally will be on or about January 30 of the applicable year, we will not repurchase in excess of 1.25% of the number of shares outstanding on December 31st of the previous calendar year; 26 Table of Contents • On the second quarter Repurchase Date, which generally will be on or about April 30 of the applicable year, we will not repurchase in excess of 1.25% of the number of shares outstanding on December 31st of the previous calendar year; • On the third quarter Repurchase Date, which generally will be on or about July 30 of the applicable year, we will not repurchase in excess of 1.25% of the number of shares outstanding on December 31st of the previous calendar year; and • On the fourth quarter Repurchase Date, which generally will be on or about October 30 of the applicable year, we will not repurchase in excess of 1.25% of the number of shares outstanding on December 31st of the previous calendar year.
Removed
In the event we do not repurchase 1.25% of the number of shares outstanding on December 31st of the previous calendar year in any particular quarter, we will increase the limitation on the number of shares to be repurchased in the next quarter and continue to adjust the quarterly limitations as necessary in accordance with the 5% annual limitation. c.
Removed
DRIP Funding Limitations. We intend to fund our SRP with proceeds we received during the prior year ended December 31 from the sale of shares pursuant to the DRIP.
Removed
We will limit the amount of DRIP proceeds used to fund share repurchases in each quarter to 25% of the amount of DRIP proceeds received during the previous calendar year, or the DRIP Funding Limitation; provided, however, that if we do not reach the DRIP Funding Limitation in any particular quarter, we will apply the remaining DRIP proceeds to the next quarter Repurchase Date and continue to adjust the quarterly limitations as necessary in order to use all of the available DRIP proceeds for a calendar year, if needed.
Removed
We cannot guarantee that DRIP proceeds will be sufficient to accommodate all requests made each quarter. The Board may, in its sole discretion, reserve other operating funds to fund the SRP, but is not required to reserve such funds.
Removed
As a result of the limitations described in (a) - (c) above, some or all of a stockholder’s shares may not be repurchased. Each quarter, we will process repurchase requests made in connection with the death of a stockholder, or, in our sole discretion, an Involuntary Exigent Circumstance.
Removed
If we are unable to process all eligible repurchase requests within a quarter due to the limitations described above or in the event sufficient funds are not available, shares will be repurchased as follows: (i) first, pro rata as to repurchases upon the death of a stockholder; and (ii) second, pro rata as to repurchases to stockholders who demonstrate, in our sole discretion, an Involuntary Exigent Circumstance.
Removed
If we do not repurchase all of the shares for which repurchase requests were submitted in any quarter, all outstanding repurchase requests will automatically roll over to the subsequent quarter and priority will be given to the repurchase requests in the subsequent quarter as provided above.
Removed
A stockholder or his or her estate, heir or beneficiary, as applicable, may withdraw a repurchase request in whole or in part at any time up to 15 days prior to the Repurchase Date. Deadline for Presentment.
Removed
A stockholder who wishes to have shares repurchased must mail or deliver to us a written request on a form provided by us and executed by the stockholder, its trustee or authorized agent, which we must receive by the last day of the quarter in which the stockholder is requesting a repurchase of his or her shares.
Removed
The fiduciary of an estate, heir, beneficiary, or trustee of a trust that wishes to have shares repurchased following the death of a stockholder must mail or deliver to us a written request on a form provided by us, including evidence acceptable to us of the death of the stockholder, and executed by the fiduciary of the estate, the heir or beneficiary, or the trustee, as applicable, which we must receive by the last day of the quarter in which the fiduciary of the estate, heir, beneficiary, or trustee is requesting a repurchase of its shares.
Removed
No Encumbrances. All shares presented for repurchase must be owned by the stockholder(s) making the presentment, or the party presenting the shares must be authorized to do so by the owner(s) of the shares. Such shares must be fully transferable and not subject to any liens or encumbrances.
Removed
Upon receipt of a request for repurchase, we may conduct a Uniform Commercial Code search to ensure that no liens are held against the shares. Any costs in conducting the Uniform Commercial Code search will be borne by us. Account Minimum.
Removed
In the event any stockholder fails to maintain a minimum balance of $2,000 of Class A shares, Class I shares, or Class T shares, we may repurchase all of the shares held by that stockholder at the NAV per share repurchase price in effect on the date we determine that the stockholder has failed to meet the minimum balance.
Removed
Termination, Amendment or Suspension of the Program. Our SRP will immediately terminate if our shares are listed on any national securities exchange.
Removed
In addition, the Board may, in its sole discretion, suspend (in whole or in part) our SRP at any time and from time to time upon notice to our stockholders and may, in its sole discretion amend or terminate our SRP at any time upon 30 days’ prior notice to our stockholders for any reason it deems appropriate.
Removed
Because we generally only repurchase shares on a quarterly basis, depending upon when during the quarter the Board makes this determination, it is possible that our stockholders would not have any additional opportunities to have their shares repurchased under the prior terms of the program, or at all, upon receipt of the notice.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

7 edited+5 added−2 removed2 unchanged
Biggest changeNeely (included as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on June 21, 2022, and incorporated herein by reference). 10.3† Form of Deferred Stock Award Agreement (included as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on January 8, 2021, and incorporated herein by reference). 10.3.1† Form of First Amendment to Deferred Stock Award Agreement (included as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on September 10, 2021, and incorporated herein by reference). 10.4 Revolving Credit Agreement, dated as of February 15, 2022, among Sila Realty Trust, Inc., as Borrower, the lenders from time to time as party to this agreement, the issuing banks from time to time as party to the Revolving Credit Agreement, Truist Bank, as Administrative Agent, Hancock Whitney Bank, as Documentation Agent, Truist Securities, Inc., BMO Capital Markets Corp., Capital One, National Association, and Wells Fargo Securities LLC, as Co-Syndication Agents, and Truist Securities, Inc., BMO Capital Markets Corp., Capital One, National Association, and Wells Fargo Securities LLC, as Joint Lead Arrangers and Joint Book Runners (included as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on February 22, 2022, and incorporated herein by reference). 10.4.1 First Amendment to the Revolving Credit Agreement, dated as of December 8, 2023, by and among Sila Realty Trust, Inc., as Borrower, Truist Bank, as Administrative Agent, and the lenders from time to time as party to the Revolving Credit Agreement (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on December 8, 2023, and incorporated herein by reference). 10.5 Term Loan Agreement, dated as of February 15, 2022, among Sila Realty Trust, Inc., as Borrower, the lenders from time to time as party to the Term Loan Agreement, Truist Bank, as Administrative Agent, and Truist Securities, Inc., BMO Capital Markets Corp., Capital One, National Association, and Wells Fargo Securities LLC as Joint Lead Arrangers and Joint Book Runners (included as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on February 22, 2022, and incorporated herein by reference). 10.5.1 First Amendment to the Term Loan Agreement (2024 Term Loan Agreement), dated as of December 8, 2023, by and among Sila Realty Trust, Inc., as Borrower, Truist Bank, as Administrative Agent, and the lenders from time to time as party to the Term Loan Agreement (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on December 8, 2023, and incorporated herein by reference). 10.6 Guaranty Agreement (Revolving Credit Agreement), dated as of February 15, 2022, by and among Sila Realty Operating Partnership, LP, Sila Operating Partnership, LP, and Sila REIT, LLC, each a Required Guarantor, and collectively, the Required Guarantors, and each of the subsidiaries of Sila Realty Trust, Inc., as Borrower, that are signatories to the agreement and each additional guarantor that may become a party to the Guaranty Agreement, individually and collectively, jointly and severally, the Guarantors, to and for the benefit of Truist Bank, as Administrative Agent, for itself and the lenders listed in the Guaranty Agreement (included as Exhibit 10.3 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on February 22, 2022, and incorporated herein by reference). 10.7 Guaranty Agreement (Term Loan Agreement), dated as of February 15, 2022, by and among Sila Realty Operating Partnership, LP, Sila Operating Partnership, LP, and Sila REIT, LLC, each a Required Guarantor, and collectively, the Required Guarantors, and each of the subsidiaries of Sila Realty Trust, Inc., as Borrower, that are signatories to the agreement and each additional guarantor that may become a party to the Guaranty Agreement, individually and collectively, jointly and severally, the Guarantors, to and for the benefit of Truist Bank, as Administrative Agent, for itself and the lenders listed in the Guaranty Agreement (included as Exhibit 10.4 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on February 22, 2022, and incorporated herein by reference). 10.8 Term Loan Agreement, dated as of May 17, 2022, by and among Sila Realty Trust, Inc., as Borrower, the lenders from time to time as party to the Term Loan Agreement, Truist Bank, as Administrative Agent, and Truist Securities, Inc., BMO Capital Markets Corp., Capital One, National Association, and Wells Fargo Securities LLC as Joint Lead Arrangers and Joint Book Runners (included as exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on May 18, 2022, and incorporated herein by reference). 10.8.1 First Amendment to the Term Loan Agreement (2028 Term Loan Agreement), dated as of December 8, 2023, by and among Sila Realty Trust, Inc., as Borrower, Truist Bank, as Administrative Agent, and the lenders from time to time as party to the Term Loan Agreement (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on December 8, 2023, and incorporated herein by reference).
Biggest changeTable of Contents 10.11† Form of Restricted Stock Award Agreement (Executive Officers) (included as Exhibit 10.8 to the Registrant's Quarterly Report on Form 10-Q (File No. 000-55435) filed on November 16, 2020, and incorporated herein by reference). 10.12† Form of Restricted Stock Award Agreement (Independent Directors) (included as Exhibit 10.9 to the Registrant's Quarterly Report on Form 10-Q (File No. 000-55435) filed on November 16, 2020, and incorporated herein by reference). 10.13 Term Loan Agreement, dated as of May 17, 2022, by and among Sila Realty Trust, Inc., as Borrower, the lenders from time to time as party to the Term Loan Agreement, Truist Bank, as Administrative Agent, and Truist Securities, Inc., BMO Capital Markets Corp., Capital One, National Association, and Wells Fargo Securities LLC as Joint Lead Arrangers and Joint Book Runners (included as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on May 18, 2022, and incorporated herein by reference). 10.13.1 First Amendment to the Term Loan Agreement (2028 Term Loan Agreement), dated as of December 8, 2023, by and among Sila Realty Trust, Inc., as Borrower, Truist Bank, as Administrative Agent, and the lenders from time to time as party to the Term Loan Agreement (included as Exhibit 10. 3 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on December 8, 2023, and incorporated herein by reference). 10.13.2 Second Amendment to Term Loan Agreement, dated as of February 18, 2025, by and among Sila Realty Trust, Inc., as Borrower, Truist Bank, as Administrative Agent, and the lenders from time to time parties thereto (included as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No. 001-42129) filed on February 19, 2025, and incorporated herein by reference). 10.14 Guaranty Agreement, dated as of May 17, 2022, by and among Sila Realty Operating Partnership, LP, Sila Operating Partnership, LP, and Sila REIT, LLC, each a Required Guarantor, and collectively, the Required Guarantors, and each of the subsidiaries of Sila Realty Trust, Inc., as Borrower, that are signatories to the agreement and each additional guarantor that may become a party to the Guaranty Agreement, individually and collectively, jointly and severally, the Guarantors, to and for the benefit of Truist Bank, as Administrative Agent, for itself and the lenders listed in the Guaranty Agreement Runners (included as Exhibit 10.2 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on May 18, 2022, and incorporated herein by reference) . 10.15 Amended and Restated Term Loan Agreement, dated as of March 20, 2024, by and among Sila Realty Trust, Inc., as Borrower, Truist Bank, as Administrative Agent, and the lenders from time to time as party to the Term Loan Agreement (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on March 21, 2024, and incorporated herein by reference). 10.15.1 First Amendment to Amended and Restated Term Loan Agreement, dated as of February 18, 2025, by and among Sila Realty Trust, Inc., as Borrower, Truist Bank, as Administrative Agent, and the lenders from time to time parties thereto (included as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-42129) filed on February 19, 2025, and incorporated herein by reference). 10.16 Amended and Restated Guaranty Agreement, dated as of March 20, 2024 (included as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on March 21, 2024, and incorporated herein by reference). 10.17 Revolving Credit Agreement, dated as of February 15, 2022, among Sila Realty Trust, Inc., as Borrower, the lenders from time to time as party to this agreement, the issuing banks from time to time as party to the Revolving Credit Agreement, Truist Bank, as Administrative Agent, Hancock Whitney Bank, as Documentation Agent, Truist Securities, Inc., BMO Capital Markets Corp., Capital One, National Association, and Wells Fargo Securities LLC, as Co-Syndication Agents, and Truist Securities, Inc., BMO Capital Markets Corp., Capital One, National Association, and Wells Fargo Securities LLC, as Joint Lead Arrangers and Joint Book Runners (included as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on February 22, 2022, and incorporated herein by reference). 10.17.1 First Amendment to the Revolving Credit Agreement, dated as of December 8, 2023, by and among Sila Realty Trust, Inc., as Borrower, Truist Bank, as Administrative Agent, and the lenders from time to time as party to the Revolving Credit Agreement (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on December 8, 2023, and incorporated herein by reference). 10.18 Guaranty Agreement (Revolving Credit Agreement), dated as of February 15, 2022, by and among Sila Realty Operating Partnership, LP, Sila Operating Partnership, LP, and Sila REIT, LLC, each a Required Guarantor, and collectively, the Required Guarantors, and each of the subsidiaries of Sila Realty Trust, Inc., as Borrower, that are signatories to the agreement and each additional guarantor that may become a party to the Guaranty Agreement, individually and collectively, jointly and severally, the Guarantors, to and for the benefit of Truist Bank, as Administrative Agent, for itself and the lenders listed in the Guaranty Agreement (included as Exhibit 10.3 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on February 22, 2022, and incorporated herein by reference) . 10.19 Credit Agreement, dated as of February 18, 2025, by and among Sila Realty Trust, Inc., as Borrower, Bank of America, N.A., as Administrative Agent, and the lenders from time to time parties thereto (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-42129) filed on February 19, 2025, and incorporated herein by reference).
Seton, dated as of July 28, 2020 (included as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on July 29, 2020, and incorporated herein by reference). 10.1.1† Amendment to Employment Agreement made and entered into on June 21, 2022, by and between Sila Realty Trust, Inc., Sila Realty Operating Partnership, LP, Sila Realty Management Company, LLC and Michael A.
Seton, dated as of July 28, 2020 (included as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on July 29, 2020, and incorporated herein by reference). 10.2.1† Amendment to Employment Agreement made and entered into on June 21, 2022, by and between Sila Realty Trust, Inc., Sila Realty Operating Partnership, LP, Sila Realty Management Company, LLC and Michael A.
Seton (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on June 21, 2022, and incorporated herein by reference). 10.2† Employment Agreement, by and among Carter Validus Mission Critical REIT II, Inc., Carter Validus Operating Partnership II, LP, CV Manager, LLC and Kay C.
Seton (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on June 21, 2022, and incorporated herein by reference). 10.3† Employment Agreement, by and among Carter Validus Mission Critical REIT II, Inc., Carter Validus Operating Partnership II, LP, CV Manager, LLC and Kay C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 99.1* C onsent of Cushman & Wakefield of Penn sylvania, L LC . 101.INS* XBRL Instance Document 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 104* Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101). * Filed herewith. ** Furnished herewith in accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 . 97.1* C lawback Policy. 101.INS* XBRL Instance Document. 101.SCH* Inline XBRL Taxonomy Extension Schema Document. 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104* Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101). * Filed herewith. ** Furnished herewith in accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section.
Neely, dated as of July 28, 2020 (included as Exhibit 10.2 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on July 29, 2020, and incorporated herein by reference).
Neely (included as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on June 21, 2022, and incorporated herein by reference). 10.4† Carter Validus Mission Critical REIT II, Inc.
Item 6. Exhibits. Exhibit No: 3.1 Third Articles of Amendment and Restatement (included as Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on August 15, 2022, and incorporated herein by reference). 3.2 Second Amended and Restated Bylaws of Sila Realty Trust, Inc.
Exhibit No: 3.1 Third Articles of Amendment and Restatement (included as Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on August 15, 2022, and incorporated herein by reference). 3.1.1 Articles of Amendment effecting Reverse Stock Split (included as Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on April 8, 2024, and incorporated herein by reference). 3.1.2 Articles of Amendment adjusting Par Value (included as Exhibit 3.2 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on April 8, 2024, and incorporated herein by reference). 3.1.3 Articles Supplementary reclassifying unissued stock (included as exhibit 3.1.3 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-42129) filed on August 7, 2024, and incorporated herein by reference). 3.1.4 Articles of Amendment renaming Class A Stock to Common Stock (included as exhibit 3.1.4 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-42129) filed on August 7, 2024, and incorporated herein by reference). 3.2 Sila Realty Trust, Inc.
Table of Contents 10.2.1† Amendment to Employment Agreement made and entered into on June 21, 2022, by and between Sila Realty Trust, Inc., Sila Realty Operating Partnership, LP, Sila Realty Management Company, LLC and Mary (“Kay”) C.
Neely, dated as of July 28, 2020 (included as Exhibit 10.2 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on July 29, 2020, and incorporated herein by reference). 10.3.1† Amendment to Employment Agreement made and entered into on June 21, 2022, by and between Sila Realty Trust, Inc., Sila Realty Operating Partnership, LP, Sila Realty Management Company, LLC and Mary (“Kay”) C.
Removed
(included as Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on June 20, 2023, and incorporated here by reference). 4.1 Subscription Agreement and Subscription Agreement Signature Page (included as Appendix B to the prospectus, incorporated by reference to the Registrant's final prospectus filed pursuant to Rule 424(b)(3), filed on November 27, 2017 (File No. 333-217579)). 4.2 Additional Subscription Agreement and Subscription Agreement Signature Page (included as Appendix C to the prospectus. incorporated by reference to the Registrant's final prospectus filed pursuant to Rule 424(b)(3), filed on November 27. 2017 (File No. 333-217579)). 4.3 Automatic Purchase Program Enrollment Form (included as Appendix D to the prospectus, incorporated by reference to the Registrant's final prospectus filed pursuant to Rule 424(b)(3), filed on November 27, 2017, and incorporated herein by reference). 4.4 Third Amended and Restated Distribution Reinvestment Plan (included as Appendix E to the prospectus attached to Post-Effective Amendment No. 11 to the Registrant’s Registration Statement on Form S-11 (File No. 333-191706) filed on January 20, 2017, and incorporated herein by reference). 4.5 Fourth Amended and Restated Distribution Reinvestment Plan (included as Appendix A in the prospectus that is part of the Registrant's Registration Statement on Form S-3 (File No. 333-220940), filed on December 6, 2017, and incorporated herein by reference). 4.6 Fifth Amended and Restated Distribution Reinvestment Plan (included as Appendix A in the prospectus that is a part of the Registrant’s Registration Statement on Form S-3 (File No. 333-275799), filed on November 30, 2023, and incorporated herein by reference). 4.7 Form of Multi-Product Subscription Agreement (included as Appendix F to the prospectus, incorporated by reference to the Registrant's final prospectus filed pursuant to Rule 424(b)(3), filed on February 10, 2017 (File No. 333-191706) and incorporated herein by reference). 4.8 Description of Capital Stock Registered Under Section 12 of the Securities Exchange Act of 1934, as amended (included as Exhibit 4.7 to the Registrant's Annual Report on Form 10-K (File No. 000-55435) filed on March 16, 2023, and incorporated herein by reference). 10.1† Employment Agreement, by and among Carter Validus Mission Critical REIT II, Inc., Carter Validus Operating Partnership II, LP, CV Manager, LLC and Michael A.
Added
Amended and Restated Bylaws, as amended November 18, 2024 (included as Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 001-42129) filed on November 19, 2024, and incorporated here by reference). 4.1* D escription of Capital Stock Registered under Section 12 of th e Securities Exchange Act of 1934, as amended. 10.1† Employment Agreement, dated November 7, 2024, by and among Sila Realty Management Company, LLC, Sila Realty Trust, Inc. and Christopher K.
Removed
Table of Contents 10.9 Guaranty Agreement, dated as of May 17, 2022, by and among Sila Realty Operating Partnership, LP, Sila Operating Partnership, LP, and Sila REIT, LLC, each a Required Guarantor, and collectively, the Required Guarantors, and each of the subsidiaries of Sila Realty Trust, Inc., as Borrower, that are signatories to the agreement and each additional guarantor that may become a party to the Guaranty Agreement, individually and collectively, jointly and severally, the Guarantors, to and for the benefit of Truist Bank, as Administrative Agent, for itself and the lenders listed in the Guaranty Agreement Runners (included as Exhibit 10.2 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on May 18, 2022, and incorporated herein by reference). 21.1 List of the Company’s Significant Subsidiaries (included as Exhibit 21.1 to the Registrant’s Annual Report on Form 10-K (File No. 000-55435) filed on March 16, 2023, and incorporated herein by reference). 23.1* Consent of KPMG, LLP, Independent Registered Public Accounting Firm. 31.1* Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1** Certification of Chief Executive Officer of the Company, pursuant to 18 U.S.C.
Added
Flouhouse (included as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 001-42129) filed on November 13 , 2024, and incorporated herein by reference). 10.2† Employment Agreement, by and among Carter Validus Mission Critical REIT II, Inc., Carter Validus Operating Partnership II, LP, CV Manager, LLC and Michael A.
Added
Amended and Restated 2014 Restricted Share Plan, dated March 6, 2020 (included as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-55435) filed on March 10, 2020, and incorporated herein by reference) . 10.4.1†* First Amendment to the Carter Validus Mission Critical REIT II, Inc.
Added
Amended and Restated 2014 Restricted Share Plan . 10.5† Form of Deferred Stock Award Agreement (included as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on January 8, 2021, and incorporated herein by reference). 10.6† Form of First Amendment to Deferred Stock Award Agreement (included as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 000-55435) filed on September 10, 2021, and incorporated herein by reference). 10.7†* Form of 2024 Deferred Stock Award Agreement. 10.8† Form of Restricted Stock Award Agreement (Executive Officers) (included as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-42129) filed on August 7, 2024 . 10.9† Form of Restricted Stock Award Agreement (Directors) (included as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-42129) filed on August 7, 2024. 10.10† Form of Restricted Stock Award Agreement (Non-Directors Non-Executive Officers) (included as Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-42129) filed on August 7, 2024 .
Added
Table of Contents 19.1* I ns ider Trading Policy. 21.1* List of the Company's Significant Subsidiaries. 23.1* C onsent of KPMG, LLP, Independent Registered Public Accounting Firm. 31.1* Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 . 31.2* Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 . 32.1** Certification of Chief Executive Officer of the Company, pursuant to 18 U.S.C.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

65 edited+73 added−14 removed24 unchanged
Biggest changeYear Ended December 31, 2023 2022 $ Change % Change Same store rental revenue $ 143,381 $ 145,167 $ (1,786) (1.2) % Same store tenant reimbursements 10,608 10,121 487 4.8 % Non-same store rental revenue 32,942 23,877 9,065 38.0 % Non-same store tenant reimbursements 2,128 817 1,311 160.5 % Other operating income 6 4 2 50.0 % Total rental revenue $ 189,065 $ 179,986 $ 9,079 5.0 % • Same store rental revenue decreased primarily due to a $1,861,000 decrease related to tenants who ceased paying all or a portion of their rent, an $834,000 increase in the write-off of straight-line rent receivables related to prior periods due to tenant uncertainty and an impairment of above-market lease intangible assets of $260,000, partially offset by a $913,000 increase in annual base rent escalations for leases indexed to CPI and a $256,000 increase from new and renewal leases. • Same store tenant reimbursements increased $487,000 primarily due to higher operating costs in the current year which are generally passed along to our tenants. • Non-same store rental revenue increased primarily due to lease termination income of $5,185,000 and a $6,406,000 increase attributable to properties acquired and properties placed in service since January 1, 2022, partially offset by a $2,427,000 decrease due to property dispositions and a $99,000 decrease due to deferment of rent on a property under renovation. • Non-same store tenant reimbursements increased $1,311,000 primarily due to properties acquired and placed in service since January 1, 2022. • There were no significant changes in other operating income. 31 Table of Contents Changes in our expenses are summarized in the following table (amounts in thousands): Year Ended December 31, 2023 2022 $ Change % Change Same store rental expenses $ 16,796 $ 16,007 $ 789 4.9 % Non-same store rental expenses 3,400 1,943 1,457 75.0 % General and administrative expenses 23,896 22,079 1,817 8.2 % Depreciation and amortization 74,293 77,199 (2,906) (3.8) % Impairment losses 24,252 47,424 (23,172) (48.9) % Total operating expenses $ 142,637 $ 164,652 $ (22,015) (13.4) % Gain on real estate dispositions $ 22 $ 460 $ (438) (95.2) % • Same store rental expenses, certain of which are subject to reimbursement by our tenants, increased $789,000 primarily due to higher operating costs in the current year. • Non-same store rental expenses, certain of which are subject to reimbursement by our tenants, increased primarily due to a $1,666,000 increase from properties acquired and properties placed in service since January 1, 2022, partially offset by a $209,000 decrease due to property dispositions. • General and administrative expenses increased primarily due to a $2,188,000 increase in stock-based compensation due to equity awards granted in 2023, and $512,000 additional separation pay primarily related to our former chief accounting officer and former chief administrative officer, partially offset by a $84,000 decrease in accelerated stock-based compensation related to former officers and directors, a decrease of $449,000 as a result of a reduction in personnel, and a $350,000 decrease in reporting costs. • Depreciation and amortization decreased primarily due to a $1,392,000 decrease from property dispositions, a $771,000 decrease attributable to fully amortized in-place leases and tenant improvements, a $1,038,000 decrease related to properties impaired and a $3,215,000 decrease in impairments of an in-place lease intangible assets, partially offset by a $3,330,000 increase attributable to properties acquired and properties placed in service since January 1, 2022, and a $180,000 increase due to capital expenditures placed in service. • Impairment losses were recorded in the aggregate amount of $24,252,000 during the year ended December 31, 2023, as a result of property sales and tenant related triggering events that occurred at certain properties.
Biggest changeChanges in our expenses are summarized in the following table (amounts in thousands): Year Ended December 31, 2024 2023 $ Change % Change Same store rental expenses $ 19,838 $ 18,535 $ 1,303 7.0 % Non-same store rental expenses 3,300 1,661 1,639 98.7 % Listing-related expenses 3,012 — 3,012 n/a General and administrative expenses 25,336 23,896 1,440 6.0 % Depreciation and amortization 74,754 74,293 461 0.6 % Impairment and disposition losses 1,210 24,252 (23,042) (95.0) % Total operating expenses $ 127,450 $ 142,637 $ (15,187) (10.6) % • Same store rental expenses increased primarily due to a $631,000 increase in non-reimbursable operating costs resulting from the Steward lease termination, and a $672,000 increase in expenses, certain of which are subject to reimbursement by our tenants, due to higher operating costs in the current period. • Non-same store rental expenses, certain of which are subject to reimbursement by our tenants, increased primarily due to a $1,870,000 increase from properties acquired since January 1, 2023, partially offset by a $231,000 decrease primarily attributable to properties sold since January 1, 2023. • Listing-related expenses of $3,012,000 were recorded during the year ended December 31, 2024, consisting of advisory fees for legal, banking, and other advisory services, related to the Listing on June 13, 2024. • General and administrative expenses increased primarily due to a $2,655,000 increase in personnel costs primarily attributable to separation pay resulting from the departure of our former chief accounting officer and former chief investment officer and performance bonuses, a $618,000 increase in accelerated stock-based compensation as a result of accelerated awards due to severance, and a $463,000 increase in other administrative costs primarily due to audit and tax fees, partially offset by a $1,052,000 decrease in stock-based compensation, a $891,000 decrease in costs primarily attributable to transfer agent and custodial fees as result of the Listing, a $203,000 decrease in legal fees, and a $150,000 decrease in directors and officers insurance expense. • Depreciation and amortization increased primarily due to a $6,723,000 increase due to properties acquired since January 1, 2023, a $3,516,000 increase in accelerated amortization of in-place lease intangible assets related to properties formerly leased to GenesisCare, and a $181,000 increase due to assets placed in service since January 1, 2023, partially offset by a 36 Table of Contents $8,058,000 decrease from property dispositions, a $1,035,000 decrease related to properties impaired in prior periods, and a $866,000 decrease attributable to fully amortized in-place lease intangible assets and fully depreciated tenant improvements. • Impairment and disposition losses were recorded in the aggregate amount of $1,210,000 during the year ended December 31, 2024, attributable to the disposition of the Fort Myers Healthcare Facilities.
Long-term Liquidity and Capital Resources Beyond the next twelve months, we expect our principal demands for funds will be for costs to acquire additional real estate properties, interest and principal payments on our credit facility, long-term capital investment demands for our real estate properties and our distributions necessary to maintain our REIT status.
Long-term Liquidity and Capital Resources Beyond the next twelve months, we expect our principal demands for funds will be for costs to acquire additional real estate properties, interest and principal payments on our credit facility, long-term capital investment demands for our real estate properties and distributions necessary to maintain our REIT status.
We, along with many of our peers in the real estate industry, consider FFO to be an appropriate supplemental measure of a REIT’s operating performance, because it is based on a net income (loss) analysis of real estate portfolio performance that excludes non-cash items such as real estate depreciation and amortization and real estate impairments.
We, along with many of our peers in the real estate industry, consider FFO to be an appropriate supplemental measure of a REIT’s operating performance because it is based on a net income analysis of real estate portfolio performance that excludes non-cash items such as real estate depreciation and amortization and real estate impairments.
Furthermore, FFO, Core FFO and AFFO are not necessarily indicative of cash flows available to fund cash needs and should not be considered as an alternative to net income (loss) as an indication of our performance or as an indication of our liquidity, including our ability to make distributions to our stockholders.
Furthermore, FFO, Core FFO and AFFO are not necessarily indicative of cash flows available to fund cash needs and should not be considered as an alternative to net income as an indication of our performance or as an indication of our liquidity, including our ability to make distributions to our stockholders.
We do not currently have any limits on the sources of funding distribution payments to our stockholders. We may pay distributions from any source, such as the sale of assets, the sale of additional securities, and offering proceeds and we do not currently have any limits on the amounts we may pay from such sources.
We do not currently have any limits on the sources of funding distribution payments to our stockholders. We may pay distributions from any source, such as the sale of assets, the sale of additional securities, offering proceeds, and borrowings, and we do not currently have any limits on the amounts we may pay from such sources.
Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. To date, we do not have any investments in unconsolidated partnerships or joint ventures.
Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. We do not have any investments in unconsolidated partnerships or joint ventures.
As of December 31, 2023, the maximum commitments available under our senior unsecured term loan with Truist Bank, as Administrative Agent for the lenders, or the 2028 Term Loan Agreement, were $275,000,000, which may be increased, subject to lender approval, to an aggregate amount not to exceed $500,000,000 and has a maturity date of January 31, 2028.
As of December 31, 2024, the maximum commitments available under our senior unsecured term loan with Truist Bank, as Administrative Agent for the lenders, or the 2028 Term Loan Agreement, were $275,000,000, which may be increased, subject to lender approval, to an aggregate amount not to exceed $500,000,000 and has a maturity date of January 31, 2028.
Net Income (Loss) and FFO, Core FFO and AFFO A description of FFO, Core FFO, and AFFO and reconciliations of these non-GAAP measures to net income (loss), the most directly comparable GAAP measure, are provided below.
Net Income and FFO, Core FFO and AFFO A description of FFO, Core FFO, and AFFO and reconciliations of these non-GAAP measures to net income, the most directly comparable GAAP measure, are provided below.
The maturity date for the Revolving Credit Agreement is February 15, 2026, which, at our election, may be extended for a period of six-months on no more than two occasions, subject to certain conditions, including the payment of an extension fee. As of December 31, 2023, the Revolving Credit Agreement had no outstanding principal balance.
The maturity date for the 2026 Revolving Credit Agreement is February 15, 2026, which, at our election, may be extended for a period of six-months on no more than two occasions, subject to certain conditions, including the payment of an extension fee. As of December 31, 2024, the 2026 Revolving Credit Agreement had no outstanding principal balance.
As of December 31, 2023, we had a total pool availability under our Unsecured Credit Facility of $1,025,000,000 and an aggregate outstanding principal balance of $525,000,000; therefore, $500,000,000 was available to be drawn under our Unsecured Credit Facility. We were in compliance with all the financial covenant requirements as of December 31, 2023.
As of December 31, 2024, we had a total pool availability under our Unsecured Credit Facility of $1,025,000,000 and an aggregate outstanding principal balance of $525,000,000; therefore, $500,000,000 was available to be drawn under our Unsecured Credit Facility. We were in compliance with all the financial covenant requirements of the Unsecured Credit Facility as of December 31, 2024.
Overview We invest in high quality properties leased to tenants capitalizing on critical and structural economic growth drivers. We are primarily focused on investing in healthcare assets across the continuum of care, which we believe typically generate predictable, durable and growing income streams.
Overview We invest in high quality properties leased to tenants capitalizing on critical and structural economic growth drivers. We are primarily focused on investing in healthcare facilities across the continuum of care, which we believe typically generate predictable, durable and growing income streams.
A discussion of the changes in our financial condition and results of operations for the years ended December 31, 2022, and 2021 may be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal years ended December 31, 2022 and December 31, 2021.
A discussion of the changes in our financial condition and results of operations for the years ended December 31, 2023 and 2022 may be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal years ended December 31, 2023 and December 31, 2022.
Short-term Liquidity and Capital Resources For at least the next twelve months, we expect our principal demands for funds will be for operating expenses, including our general and administrative expenses, as well as the acquisition of real estate and real estate-related investments and funding of capital improvements and tenant improvements, distributions to and stock repurchases from stockholders, and interest payments on our credit facility.
Short-term Liquidity and Capital Resources For at least the next twelve months, we expect our principal demands for funds will be for operating expenses, including our general and administrative expenses, as well as the acquisition of real estate and real estate-related investments, including mezzanine loans, and funding of capital improvements and tenant improvements, distributions to, and potential stock repurchases from, stockholders, and interest payments on our credit facility.
Additionally, changes in economic and operating conditions, including changes in the financial condition of our tenants, and changes to our intent and ability to hold the related asset, that occur after our impairment assessment could impact the assumptions used in that assessment and could result in future charges to earnings if assumptions regarding those investments differ from actual results.
Additionally, changes in economic and operating conditions, including changes in the financial 32 Table of Contents condition of our tenants, and changes to our intent and ability to hold the related asset, that occur after our impairment assessment could impact the assumptions used in that assessment and could result in future charges to earnings if assumptions regarding those investments differ from actual results.
Significant increases or decreases in any of these inputs, particularly with regard to cash flow projections and discount and capitalization rates, would result in a significantly lower or higher fair value measurement of the real estate assets being assessed.
Significant increases or decreases in any of these inputs, particularly with regard to the expected holding period, cash flow projections and discount and capitalization rates, would result in a significantly lower or higher fair value measurement of the real estate assets being assessed.
Liquidity and Capital Resources Our principal uses of funds are for acquisitions of real estate and real estate-related investments, capital expenditures, operating expenses, distributions to, and share repurchases from, stockholders, and principal and interest payments on current 32 Table of Contents and future indebtedness.
Liquidity and Capital Resources Our principal uses of funds are for acquisitions of real estate and real estate-related investments, capital expenditures, operating expenses, distributions to, and share repurchases from, stockholders, and principal and interest payments on current and future indebtedness.
The amount of distributions payable to our stockholders is determined by the Board and is dependent on a number of factors, including our funds available for distribution, financial condition, lenders' restrictions and limitations, capital expenditure requirements, corporate law restrictions and the annual distribution requirements needed to maintain our status as a REIT under the Internal Revenue Code of 1986, as amended.
The amount of distributions payable to our stockholders is determined by the Board and is dependent on a number of factors, including our funds available for distribution, financial condition, lenders' restrictions and limitations, capital expenditure requirements, corporate law restrictions and the annual distribution requirements needed to maintain our status as a REIT under the Code.
This section of the Annual Report on Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
This section of the Annual Report on Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
We may determine fair value by using a direct capitalization method, a discounted cash flow method or by utilizing comparable sales information. The direct capitalization method is based on a capitalization rate applied to the underlying asset group's most recent stabilized trailing twelve-month net operating income at the measurement date.
We may determine fair value by using a direct capitalization method, a discounted cash flow method or by utilizing comparable sales information. The direct capitalization method is based on a capitalization rate applied to the underlying asset group's stabilized next twelve-month net operating income at the measurement date.
We refer to the Revolving Credit Agreement, the 2024 Term Loan Agreement and the 2028 Term Loan Agreement, collectively, as the “Unsecured Credit Facility,” which has aggregate commitments available of $1,025,000,000, as of December 31, 2023.
We refer to the 2026 Revolving Credit Agreement, the 2027 Term Loan Agreement and the 2028 Term Loan Agreement, collectively, as the “Unsecured Credit Facility,” which has aggregate commitments available of $1,025,000,000, as of December 31, 2024.
The 2028 Term Loan Agreement is pari passu with our Revolving Credit Agreement and 2024 Term Loan Agreement. As of December 31, 2023, the 2028 Term Loan Agreement had an aggregate outstanding principal balance of $275,000,000.
The 2028 Term Loan Agreement is pari passu with our 2026 Revolving Credit Agreement and 2027 Term Loan Agreement. As of December 31, 2024, the 2028 Term Loan Agreement had an aggregate outstanding principal balance of $275,000,000.
As of December 31, 2023, the 2024 Term Loan Agreement had an aggregate outstanding principal balance of $250,000,000.
As of December 31, 2024, the 2027 Term Loan Agreement had an aggregate outstanding principal balance of $250,000,000.
The discounted cash flow method is based on estimated future cash flow projections utilizing discount rates, terminal capitalization rates, and planned capital expenditures. We use 29 Table of Contents judgment to determine an appropriate discount rate to apply to the cash flows in the discounted cash flow calculation.
The discounted cash flow method is based on estimated future cash flow projections utilizing discount rates, terminal capitalization rates, and planned capital expenditures. We use judgment to determine an appropriate discount rate to apply to the cash flows in the discounted cash flow calculation.
GenesisCare Bankruptcy Filing As disclosed in the Current Report on Form 8-K that the Company filed with the SEC on June 5, 2023, GenesisCare, sponsor and owner of the tenant in 17 of our real estate properties, announced that it filed for Chapter 11 bankruptcy protection under the United States Bankruptcy Code.
GenesisCare Bankruptcy Filing As disclosed in the Current Report on Form 8-K that we filed with the SEC on June 5, 2023, GenesisCare, the sponsor and owner of the tenant in certain of our real estate properties announced that it filed for Chapter 11 bankruptcy protection under the United States Bankruptcy Code on June 1, 2023.
We may also make other real estate-related investments, which may include equity or debt interests in other real estate entities. As of December 31, 2023, we owned 131 real estate properties and two undeveloped land parcels.
We may also make other real estate-related investments, which may include equity or debt interests in other real estate entities. As of December 31, 2024, we owned 135 real estate properties and two undeveloped land parcels.
If the carrying value of the asset group exceeds the estimated undiscounted cash flows, an impairment loss is recognized equal to the excess of carrying value over the estimated fair value of the asset group. In determining the fair value of an asset group, we exercise considerable judgment on several factors.
If the carrying value of the asset group exceeds the estimated undiscounted cash flows, an impairment loss is recognized to the extent the carrying value exceeds the estimated fair value of the asset group. In determining the fair value of an asset group, we exercise considerable judgment on several factors.
We define FFO, consistent with NAREIT’s definition, as net income (loss) (calculated in accordance with GAAP), excluding gains (or losses) from sales of real estate assets and impairments of real estate assets, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures.
We define FFO, consistent with NAREIT’s definition, as net income (calculated in accordance with GAAP), excluding gains from sales of real estate assets, impairment of real estate assets and disposition losses from sales of real estate assets, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures.
Generally, cash for these items is generated from operations of our current and future investments. Our sources of funds are primarily operating cash flows, funds equal to amounts reinvested in the DRIP, our credit facility and other potential borrowings. When we acquire a property, we prepare a capital plan that contemplates the estimated capital needs of that investment.
Generally, cash for these items is generated from operations of our current and future investments. Our sources of funds are primarily operating cash flows, our credit facility and other potential borrowings. When we acquire a property, we prepare a capital plan that contemplates the estimated capital needs of that investment.
We currently expect that substantially all net cash flows from our operations will be used to fund acquisitions, certain capital expenditures identified at acquisition, ongoing capital expenditures, interest and principal payments on outstanding debt and distributions to our stockholders. Material Cash Requirements As of December 31, 2023, we had approximately $202,019,000 in cash and cash equivalents.
We currently expect that substantially all net cash flows from our operations will be used to fund acquisitions, certain capital expenditures identified at acquisition, ongoing capital expenditures, interest and principal payments on outstanding debt and distributions to our stockholders. Material Cash Requirements As of December 31, 2024, we had $39,844,000 in cash and cash equivalents.
We expect to meet our short-term liquidity requirements through net cash flows provided by operations, funds equal to amounts reinvested in the DRIP and borrowings on our credit facility and potential other borrowings. We believe we will have sufficient liquidity available to meet our obligations in a timely manner, under both normal and stressed conditions, for the next twelve months.
We expect to meet our short-term liquidity 37 Table of Contents requirements through net cash flows provided by operations and borrowings on our credit facility and potential other borrowings. We believe we will have sufficient liquidity available to meet our obligations in a timely manner, under both normal and stressed conditions, for the next twelve months.
The following table shows the property statistics of our real estate properties as of December 31, 2023 and 2022: December 31, 2023 2022 Number of real estate properties (1) 131 132 Leased square feet 5,085,000 5,508,000 Weighted average percentage of rentable square feet leased 99.4 % 99.5 % (1) As of December 31, 2023, we owned 131 real estate properties and two undeveloped land parcels.
The following table shows the property statistics of our real estate properties as of December 31, 2024 and 2023: December 31, 2024 2023 Number of real estate properties (1) 135 131 Leased square feet 5,050,000 5,085,000 Weighted average percentage of rentable square feet leased 96.0 % 99.4 % (1) As of December 31, 2024, we owned 135 real estate properties and two undeveloped land parcels.
As of December 31, 2023, we were in compliance with all such cross-default provisions. 33 Table of Contents Debt Service Requirements Credit Facility As of December 31, 2023, the maximum commitments available under our senior unsecured revolving line of credit with Truist Bank, as Administrative Agent for the lenders, or the Revolving Credit Agreement, were $500,000,000, which may be increased, subject to lender approval, through incremental term loans and/or revolving loan commitments in an aggregate amount not to exceed $1,000,000,000.
Debt Service Requirements Credit Facility As of December 31, 2024, the maximum commitments available under our senior unsecured revolving line of credit with Truist Bank, as Administrative Agent for the lenders, or the 2026 Revolving Credit Agreement, were $500,000,000, which may be increased, subject to lender approval, through incremental term loans and/or revolving loan commitments in an aggregate amount not to exceed $1,000,000,000.
We continually monitor our tenants' ability to meet their lease obligations to pay us rent to determine if any adjustments should be reflected currently. As of December 31, 2023, our real estate properties were 99.4% leased.
We continually monitor our tenants' ability to meet their lease obligations to pay us rent to determine if any adjustments should be reflected currently. As of December 31, 2024, our properties were 96.0% leased.
For operating properties, these indicators could include a tenant being delinquent or not paying rent, a reduction in our estimated hold period, a significant decline in a property’s leasing percentage, a current period operating loss or negative cash flows combined with a history of losses at the property, a significant decline in lease rates for that property or others in the property’s market, a significant change in the market value of the property, or an adverse change in the financial condition of significant tenants.
For operating properties, these indicators could include a reduction in our expected holding period, a tenant having unpaid rent or a delinquency, a significant decline in a property’s leased percentage, a current period operating loss or negative cash flows combined with a history of losses at the property, a significant decline in lease rates for that property or others in the property’s market, a significant change in the market value of the property, or an adverse change in the financial condition of significant tenants.
See “Risk Factors – General Risk Factors – Distributions paid from sources other than our cash flows from operations, including from the proceeds of our Offerings, will result in us having fewer funds available for the acquisition of properties and real estate-related investments, which may adversely affect our ability to fund future distributions with cash flows from operations and may adversely affect a stockholder’s overall return” in Part I, Item 1A of this Annual Report on Form 10-K for a discussion of risks related to funding distribution payments from various sources.
See “Risk Factors – General Risk Factors – Distributions paid from sources other than our cash flows from operations, including from the proceeds of any offerings of our securities, will result in us having fewer funds available for the acquisition of properties and real estate-related investments, which may adversely affect our ability to fund future distributions with cash flows from operations and may adversely affect a stockholder’s overall return” in Part I, Item 1A of this Annual Report on Form 10-K for a discussion of risks related to funding distribution payments from various sources. 40 Table of Contents For federal income tax purposes, distributions to common stockholders are characterized as ordinary dividends, capital gain distributions, or nontaxable distributions.
We have agreements with each derivative counterparty that contain cross-default provisions; if we default on our indebtedness, then we could also be declared in default on our derivative obligations, resulting in an acceleration of payment of any net amounts due under our derivative contracts.
As of December 31, 2024, the aggregate notional amount under our derivative instruments was $525,000,000. We have agreements with each derivative counterparty that contain cross-default provisions; if we default on our indebtedness, then we could also be declared in default on our derivative obligations, resulting in an acceleration of payment of any net amounts due under our derivative contracts.
We define "same store properties" as properties that were owned and operated for the entirety of both calendar periods being compared and exclude properties under development, re-development, or classified as held for sale.
In order to evaluate our overall portfolio, management analyzes the results of our same store properties. We define "same store properties" as properties that were owned and operated for the entirety of both calendar periods being compared and exclude properties under development, re-development, or classified as held for sale.
Attributable to Class A shares, Class I shares, Class T shares, and Class T2 shares of common stock for the years ended December 31, 2022 and 2021.
Attributable to Class A shares, Class I shares, and Class T shares of common stock for the year ended December 31, 2023.
For federal income tax purposes, distributions to common stockholders are characterized as ordinary dividends, capital gain distributions, or nontaxable distributions. To the extent that we make a distribution in excess of our current or accumulated earnings and profits, such excess will be a nontaxable return of capital, reducing the tax basis in each U.S. stockholder’s shares.
To the extent that we make a distribution in excess of our current or accumulated earnings and profits, such excess will be a nontaxable return of capital, reducing the tax basis in each U.S. stockholder’s shares. Further, the amount of distributions in excess of a U.S. stockholder’s tax basis in such shares will be taxable as a realized gain.
The method used to evaluate the value and performance of real estate under GAAP should be considered as a more relevant measure of operating performance and considered more prominent than the non-GAAP financial measures presented here. 37 Table of Contents Reconciliation of Net Income (Loss) to FFO, Core FFO and AFFO The following table presents a reconciliation of net income (loss) attributable to common stockholders, which is the most directly comparable GAAP financial measure, to FFO, Core FFO and AFFO for the years ended December 31, 2023 and 2022 (amounts in thousands): Year Ended December 31, 2023 2022 Net income (loss) attributable to common stockholders $ 24,042 $ (7,978) Adjustments: Depreciation and amortization of real estate assets 74,202 77,099 Gain on real estate dispositions (22) (460) Impairment losses 24,252 47,424 FFO $ 122,474 $ 116,085 Adjustments: Severance 1,401 889 Write-off of straight-line rent receivables related to prior periods 3,268 2,434 Accelerated stock-based compensation 318 402 Amortization of above (below) market lease intangibles, including ground leases 1,386 1,044 Loss on extinguishment of debt — 3,367 Core FFO $ 128,847 $ 124,221 Adjustments: Deferred rent 1,644 1,535 Straight-line rent adjustments (5,465) (9,695) Amortization of deferred financing costs 1,665 1,679 Stock-based compensation 5,966 3,778 AFFO $ 132,657 $ 121,518
The method used to evaluate the value and performance of real estate under GAAP should be considered a more relevant measure of operating performance and more prominent than the non-GAAP financial measures presented here. 42 Table of Contents Reconciliation of Net Income to FFO, Core FFO and AFFO The following table presents a reconciliation of net income attributable to common stockholders, which is the most directly comparable GAAP financial measure, to FFO, Core FFO and AFFO for the years ended December 31, 2024 and 2023 (amounts in thousands): Year Ended December 31, 2024 2023 Net income attributable to common stockholders $ 42,657 $ 24,042 Adjustments: Depreciation and amortization of real estate assets 74,660 74,202 Gain on dispositions of real estate (341) (22) Impairment and disposition losses 1,210 24,252 FFO (1) $ 118,186 $ 122,474 Adjustments: Listing-related expenses 3,012 — Severance 1,885 1,401 Write-off of straight-line rent receivables related to prior periods — 3,268 Accelerated stock-based compensation 936 318 Amortization of above (below) market lease intangibles, including ground leases, net 1,778 1,386 Loss on extinguishment of debt 228 — Core FFO (1) $ 126,025 $ 128,847 Adjustments: Deferred rent (2) 3,510 1,644 Straight-line rent adjustments (5,555) (5,465) Amortization of deferred financing costs 2,185 1,665 Stock-based compensation 4,914 5,966 AFFO (1) $ 131,079 $ 132,657 (1) The years ended December 31, 2024 and 2023 include $4,098,000 and $5,650,000, respectively, of lease termination fee income received.
In addition to the cash we need to conduct our normal business operations, we expect to require approximately $19,944,000 in cash over the next twelve months, of which $17,198,000 is related to estimated interest payments on our outstanding debt (calculated based on our effective interest rates as of December 31, 2023) and $2,746,000 is related to our various obligations as lessee.
In addition to the cash we need to conduct our normal business operations, we expect to require $44,584,000 in cash over the next twelve months, of which $24,259,000 is related to estimated interest payments on our outstanding debt (calculated based on our effective interest rates as of December 31, 2024), $17,543,000 is related to unfunded loan commitment amounts undrawn on our mezzanine loans, and $2,782,000 is related to our various obligations as lessee.
We estimate future rental rates, future capital expenditures, future operating expenses, and market capitalization rates for residual values, among other things. In addition, if there are alternative strategies for the future use of the asset, we assess the probability of each alternative strategy and perform a probability-weighted undiscounted cash flow analysis to assess the recoverability of the asset group.
In addition, if there are alternative strategies for the future use of the asset, we assess the probability of each alternative strategy and perform a probability-weighted undiscounted cash flow analysis to assess the recoverability of the asset group.
The 2024 Term Loan Agreement has a maturity date of December 31, 2024, and, at our election, may be extended for a period of six-months on no more than two occasions, subject to the satisfaction of certain conditions (which we currently meet), including the payment of an extension fee.
The 38 Table of Contents 2027 Term Loan Agreement has a maturity date of March 20, 2027, and, at our election, may be extended for a period of one year on no more than two occasions, subject to the satisfaction of certain conditions, including the payment of an extension fee.
For the year ended December 31, 2022, our cash flows provided by operations of approximately $121,675,000 covered 100% of our ordinary distributions paid (total ordinary distributions were approximately $90,144,000, of which $65,310,000 was cash and $24,834,000 was reinvested in shares of our common stock pursuant to the DRIP) during such period.
For the year ended December 31, 2024, our cash flows provided by operations of approximately $132,847,000 covered 100% of our ordinary distributions paid (total ordinary distributions were approximately $91,346,000, of which $81,367,000 was cash and $9,979,000 was reinvested in shares of our common stock pursuant to the DRIP) during such period.
As of December 31, 2023, the maximum commitments available under our senior unsecured term loan with Truist Bank, as Administrative Agent for the lenders, or the 2024 Term Loan Agreement, were $250,000,000, which may be increased, subject to lender approval, to an aggregate amount not to exceed $550,000,000.
As of December 31, 2024, the maximum commitments available under the 2027 Term Loan Agreement, were $250,000,000, which may be increased, subject to lender approval, to an aggregate amount not to exceed $500,000,000.
While interest rates on variable rate debt have increased and may continue to increase, we believe our exposure is limited at this time due to our hedging strategy, which has effectively fixed 100% of our outstanding debt as of December 31, 2023, allowing us to reasonably project our liquidity needs.
While interest rates on variable rate debt increased in recent years and then declined some due to the recent interest rate cuts by the Federal Reserve, we believe our exposure to increased or fluctuating interest rates is limited at this time due to our hedging strategy, which has effectively fixed 100% of our outstanding debt as of December 31, 2024, and therefore allowed us to reasonably project our liquidity needs.
One of our principal liquidity needs is the payment of principal and interest on outstanding indebtedness. As of December 31, 2023, we had $525,000,000 of principal outstanding under our Unsecured Credit Facility (as defined below). We are required by the terms of certain loan documents to meet certain covenants, such as financial ratios and reporting requirements.
One of our principal liquidity needs is the payment of principal and interest on outstanding indebtedness. As of December 31, 2024, we had $525,000,000 of principal outstanding under our Unsecured Credit Facility (as defined below).
We currently expect to meet our long-term liquidity requirements through proceeds from cash flows from operations and borrowings on our credit facility and potential other borrowings.
We currently expect to meet our long-term liquidity requirements through proceeds from cash flows from operations and borrowings on our credit facility, potential other borrowings and potential equity offerings. We expect to pay distributions to our stockholders from cash flows from operations; however, we have used, and may continue to use, other sources to fund distributions, as necessary.
Real Estate Acquisitions and Dispositions in 2023 • We purchased two healthcare properties, comprising approximately 130,000 rentable square feet for an aggregate purchase price of approximately $69,822,000. • We sold three healthcare properties for an aggregate sale price of $271,107,000 and generated net proceeds of $270,306,000.
Real Estate Acquisitions and Dispositions in 2024 • We purchased eight healthcare properties, comprising approximately 307,000 rentable square feet for an aggregate purchase price of approximately $164,053,000. • We sold four healthcare properties for an aggregate sale price of $18,700,000 and generated net proceeds of $17,705,000.
Financing Activities Significant financing activities included: • Payment of $66,515,000 in cash distributions to common stockholders during the year ended December 31, 2023, compared to $65,310,000 during the year ended December 31, 2022. • Repurchase of $12,374,000 of common stock under our share repurchase program during the year ended December 31, 2023, compared to $9,217,000 during the year ended December 31, 2022. • The following Unsecured Credit Facility related activity during the year ended December 31, 2023: ◦ Repayment of $58,000,000 on the Revolving Credit Agreement with cash flows from operations and proceeds from a disposition; ◦ Repayment of $50,000,000 on the 2024 Term Loan Agreement with proceeds from dispositions, the collection of a note receivable related to a disposition and cash flows from operations; and ◦ Draw of $50,000,000 on the Revolving Credit Agreement to fund an acquisition. • The following Unsecured Credit Facility related activity during the year ended December 31, 2022: ◦ Draw of $70,000,000 on the Revolving Credit Agreement to fund acquisitions; ◦ Draw of $70,000,000 on the 2028 Term Loan Agreement to fund acquisitions; ◦ Repayment of $57,000,000 on the Revolving Credit Agreement with proceeds from dispositions and cash flows from operations; ◦ Replacement of $500,000,000 from our prior unsecured credit facility with borrowings from our new Revolving Credit Agreement and 2024 Term Loan Agreement; ◦ Draw of $205,000,000 on the 2028 Term Loan Agreement at closing to pay down the $205,000,000 outstanding balance on the Revolving Credit Agreement; and ◦ Payment of $6,937,000 in deferred financing costs as a result of entering into the Revolving Credit Agreement, 2024 Term Loan Agreement and 2028 Term Loan Agreement during the year ended December 31, 2022.
Financing Activities Significant financing activities included: • Payment of $81,367,000 in cash distributions to common stockholders, including cash distributions on vested performance-based deferred stock unit awards, during the year ended December 31, 2024, compared to $66,515,000 during the year ended December 31, 2023. • Tender Offer repurchase of $50,000,000 of Common Stock and $2,093,000 of costs and fees related to the Tender Offer during the year ended December 31, 2024. • Repurchase of $9,402,000 of Common Stock pursuant to the Terminated SRP and for the net settlement of withholding taxes in connection with the vesting of restricted stock during the year ended December 31, 2024, compared to $12,374,000 during the year ended December 31, 2023. • Payment of $2,578,000 in deferred financing costs as a result of entering into the 2027 Term Loan Agreement during the year ended December 31, 2024, compared to $193,000 during the year ended December 31, 2023. • The following Unsecured Credit Facility related activity during the year ended December 31, 2024: ◦ Replacement of $250,000,000 on our prior term loan with borrowings from the 2027 Term Loan Agreement. ◦ Draw of $20,000,000 on the 2026 Revolving Credit Agreement to fund an acquisition. ◦ Repayment of $20,000,000 on the 2026 Revolving Credit Agreement with proceeds from dispositions and cash flows from operations. • The following Unsecured Credit Facility related activity during the year ended December 31, 2023: ◦ Repayment of $58,000,000 on the 2026 Revolving Credit Agreement with cash flows from operations and proceeds from a disposition. ◦ Repayment of $50,000,000 on the 2024 Term Loan Agreement with proceeds from a disposition, the collection of a note receivable related to a disposition and cash flows from operations; and ◦ Draw of $50,000,000 on the 2026 Revolving Credit Agreement to fund an acquisition.
Further, the amount of distributions in excess of a U.S. stockholder’s tax basis in such shares will be taxable as a realized gain. 35 Table of Contents The following table shows the sources of distributions paid during the years ended December 31, 2023 and 2022 (amounts in thousands): Year Ended December 31, Character of Distributions (1) : 2023 2022 Ordinary dividends 61.41 % 40.94 % Capital gain distributions — % — % Nontaxable distributions 38.59 % 59.06 % Total 100.00 % 100.00 % (1) Attributable to Class A shares, Class I shares, Class T shares of common stock for the year ended December 31, 2023.
The following table shows the sources of distributions paid during the years ended December 31, 2024 and 2023: Year Ended December 31, Character of Distributions (1) : 2024 2023 Ordinary dividends 62.79 % 61.41 % Capital gain distributions — % — % Nontaxable distributions 37.21 % 38.59 % Total 100.00 % 100.00 % (1) Attributable to Class A shares, Class I shares, and Class T shares of common stock until the Listing and attributable to Common Stock after the Listing for the year ended December 31, 2024.
As of December 31, 2023, we had material obligations beyond 12 months (or that we will meet the extension criteria on the maturity date) in the amount of approximately $676,064,000, inclusive of $560,444,000 related to principal and estimated interest payments on our outstanding debt (calculated based on our effective interest rates as of December 31, 2023) and $115,620,000 related to our various obligations as lessee.
As of December 31, 2024, we had material obligations beyond twelve months in the amount of $679,195,000, inclusive of $564,548,000 related to principal and estimated interest payments on our outstanding debt (calculated based on our effective interest rates as of December 31, 2024) and $114,647,000 related to our various obligations as lessee.
As a result, we ceased recognizing rent on a straight-line basis and have only recorded rent for GenesisCare to the extent we have received cash. In addition, during the year ended December 31, 2023, we wrote off $1,630,000 of straight-line rent receivables related to GenesisCare, as a reduction in rental revenue, because the amounts were determined to be uncollectible.
We recorded a write-off of straight-line rent receivables related to GenesisCare of $1,630,000 for the year ended December 31, 2023, as a reduction in rental revenue because the collectibility of the amounts was not probable.
If we determine that an asset has indicators of impairment, we then determine whether the undiscounted cash flows associated with the asset group exceed the carrying amount of the asset group. In calculating the undiscounted net cash flows of an asset group, we use considerable judgment to estimate several inputs.
The length of the expected holding period coupled with these other indicators impact the projected undiscounted cash flows. If we determine that an asset has indicators of impairment, we then determine whether the undiscounted cash flows associated with the asset group over the expected holding period exceed the carrying amount of the asset group.
Commitments and Contingencies For a discussion of our commitments and contingencies, see Note 17—"Commitments and Contingencies" to the consolidated financial statements that are a part of this Annual Report on Form 10-K. 36 Table of Contents Non-GAAP Financial Measures In the real estate industry, analysts and investors employ certain non-GAAP supplemental financial measures in order to facilitate meaningful comparisons between periods and among peer companies.
Non-GAAP Financial Measures In the real estate industry, analysts and investors employ certain non-GAAP supplemental financial measures in order to facilitate meaningful comparisons between periods and among peer companies.
As of December 31, 2022, we owned 132 real estate properties and two undeveloped land parcels. 30 Table of Contents The following table summarizes our real estate activity for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Real estate properties acquired 2 7 Real estate properties disposed 3 — (1) Aggregate purchase price of real estate properties acquired (2) $ 69,822,000 $ 157,194,000 Net book value of real estate properties disposed $ 270,279,000 $ — (1) Leased square feet of real estate property additions 130,000 284,000 Leased square feet of real estate property dispositions 551,000 — (1) During the year ended December 31, 2022, we disposed of one land parcel that formerly contained a property.
The following table summarizes our real estate activity for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Real estate properties acquired 8 2 Real estate properties disposed 4 3 Aggregate purchase price of real estate properties acquired (1) $ 164,053,000 $ 69,822,000 Net book value of real estate properties disposed $ 18,099,000 $ 270,279,000 Leased square feet of real estate property additions 307,000 130,000 Leased square feet of real estate property dispositions (2) 71,000 551,000 (1) Includes capitalized acquisition costs associated with transactions determined to be asset acquisitions.
We cannot provide assurances, however, that actual expenditures will not exceed these estimates. The 2024 Term Loan (as defined below) has a maturity date of December 31, 2024, and, at our election, may be extended for a period of six-months on no more than two occasions, subject to the satisfaction of certain conditions, including the payment of an extension fee.
The maturity date for the 2029 Revolving Credit Agreement is February 16, 2029, which, at our election, may be extended for a period of six-months on no more than two occasions, subject to certain conditions, including a payment of an extension fee.
GenesisCare sought U.S. bankruptcy court approval to reject certain unexpired real property leases. GenesisCare's lease obligations with us were not included in any motions. GenesisCare continues to make its lease payments due to us in accordance with their contractual terms, although we are in ongoing negotiations with GenesisCare regarding certain adjustments to its lease.
During the bankruptcy proceedings, GenesisCare sought U.S. bankruptcy court approval to reject certain unexpired real property leases. GenesisCare's lease obligations with us were not included in any motions. On March 27, 2024, we entered into the GenesisCare Amended Master Lease with GenesisCare in connection with its emergence from bankruptcy on February 16, 2024.
These include severance, write-off of straight-line rent receivables related to prior periods, accelerated stock-based compensation, amortization of above- and below-market lease intangibles (including ground leases) and loss on extinguishment of debt. We calculate AFFO by further adjusting Core FFO for the following items: deferred rent, current period straight-line rent adjustments, amortization of deferred financing costs and stock-based compensation.
We consider it to be a useful supplemental financial performance measure because it provides investors with additional information to understand our sustainable performance. Excluded items include listing-related expenses, severance, write-off of straight-line rent receivables related to prior periods, accelerated stock-based compensation, amortization of above- and below-market lease intangibles (including ground leases) and loss on extinguishment of debt.
Impairment losses were recorded in the aggregate amount of $47,424,000 during the year ended December 31, 2022, as a result of tenant related triggering events that occurred at certain properties. • Gains on real estate dispositions were $22,000 and $460,000 during the years ended December 31, 2023 and 2022, respectively.
In addition, during the year ended December 31, 2023, we recorded goodwill impairment losses on real estate of $4,010,000, of which $2,422,000 was a result of property sales and tenant related triggering events that occurred at certain properties, $1,238,000 was a result of triggering events at properties leased or formerly leased to GenesisCare, and $350,000 was related to Steward.
As of December 31, 2023, we were in compliance with all such covenants and requirements on our Unsecured Credit Facility. As of December 31, 2023, the aggregate notional amount under our derivative instruments was $525,000,000.
We are required by the terms of certain loan documents relating to the Unsecured Credit Facility to meet certain covenants, such as financial ratios and reporting requirements. As of December 31, 2024, we were in compliance with all such covenants and requirements on our Unsecured Credit Facility.
We believe FFO provides a useful understanding of our performance to the investors and to our management, and when compared to year over year, FFO reflects the impact on our operations from trends in occupancy.
We believe FFO provides a useful understanding of our performance to the investors and to our management, and when compared to year over year, FFO reflects the impact on our operations from trends in occupancy. 41 Table of Contents We calculate Core FFO by adjusting FFO to remove the effect of certain GAAP non-cash income and expense items, unusual and infrequent items that are not expected to impact our operating performance on an ongoing basis, items that affect comparability to prior periods and/or items that are not related to our core real estate operations.
Cash Flows Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Year Ended December 31, (in thousands) 2023 2022 Change Net cash provided by operating activities $ 128,924 $ 121,675 $ 7,249 Net cash provided by (used in) investing activities $ 197,307 $ (142,812) $ 340,119 Net cash (used in) provided by financing activities $ (137,129) $ 1,340 $ (138,469) Operating Activities • Net cash provided by operating activities increased primarily due to an increase in cash collected for rent resulting from acquiring and placing properties in service, annual rent increases, new leasing and renewal activity and the receipt of lease termination income, partially offset by a decrease related to property dispositions and tenants who ceased paying all or a portion of their rent and an increase in interest paid on our credit facility.
Cash Flows Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Year Ended December 31, (in thousands) 2024 2023 Change Net cash provided by operating activities $ 132,847 $ 128,924 $ 3,923 Net cash (used in) provided by investing activities $ (149,687) $ 197,307 $ (346,994) Net cash used in financing activities $ (145,501) $ (137,129) $ (8,372) Operating Activities • Net cash provided by operating activities increased primarily due to cash collected for rent resulting from property acquisitions, annual rent increases, dividend income from money market funds and a decrease in interest paid on our credit facility, partially offset by a decrease in cash due to property dispositions, vacancies, and lease terminations with Steward and GenesisCare. 39 Table of Contents Investing Activities Significant investing activities included: • Investment of $164,053,000 to purchase eight properties in four separate transactions during the year ended December 31, 2024, compared to an investment of $69,822,000 to purchase two properties during the year ended December 31, 2023. • Received $17,705,000 from the sale of four properties during the year ended December 31, 2024, compared to receiving $270,306,000 from the sale of three properties during the year ended December 31, 2023. • Incurred capital expenditures, primarily for tenant improvements, of $2,989,000 during the year ended December 31, 2024, compared to incurring $3,177,000 during the year ended December 31, 2023.
(2) Includes capitalized acquisition costs associated with transactions determined to be asset acquisitions. This section describes and compares our results of operations for the years ended December 31, 2023 and 2022. We generate substantially all of our revenue from property operations. In order to evaluate our overall portfolio, management analyzes the results of our same store properties.
(2) The Fort Myers Healthcare Facilities and the Yucca Valley Healthcare Facility were vacant upon disposition on September 25, 2024 and December 10, 2024, respectively. This section describes and compares our results of operations for the years ended December 31, 2024 and 2023. We generate substantially all of our revenue from property operations.
Changes in interest expense and interest and other income are summarized in the following table (amounts in thousands): Year Ended December 31, 2023 2022 $ Change % Change Interest expense $ 23,110 $ 24,077 $ (967) (4.0) % Interest and other income (702) (305) (397) 130.2 % • Interest expense decreased primarily due to $3,367,000 in loss on extinguishment of debt and $1,400,000 in interest rate swap amortization recognized during the year ended December 31, 2022, partially offset by an increase of $3,054,000 related to changes in the weighted average interest rate on our credit facility that was subject to variable rates during the year and an increase of $856,000 due to an increase in the weighted average outstanding principal balance on our credit facility of $32,452,000. • Interest and other income increased primarily due to a $457,000 increase in dividend income from investments in money market funds, a $118,000 increase in interest income from cash deposits, and a $105,000 increase in interest income on a note receivable, partially offset by a decrease of $283,000 in settlement income from disposed properties.
On March 31, 2023, we sold one property for a sales price of $12,500,000, resulting in a gain on sale of $21,000. • Interest and other income increased primarily due to increases in dividend income from money market funds. • Interest expense decreased primarily due to a $1,481,000 decrease related to a reduction in the weighted average outstanding principal balance on our credit facility of $45,631,000 and a decrease of $1,157,000 related to a reduction in the weighted average interest rate on our credit facility, partially offset by a $520,000 increase in amortization of deferred financing costs and a $228,000 increase in loss on extinguishment of debt.
Removed
We raised the equity capital for our real estate investments through our Offerings from May 2014 through November 2018, and we have offered shares pursuant to the DRIP Offerings since November 2017.
Added
Regulation FD Disclosures We use any of the following to comply with our disclosure obligations under Regulation FD: SEC filings; press releases; public conference calls; or our website. We routinely post important information on our website at www.silarealtytrust.com, including information that may be deemed material.
Removed
Bankruptcy proceedings are subject to uncertainty and there can be no assurance how the bankruptcy court's or other parties' actions or decisions may impact GenesisCare. Due to GenesisCare filing for bankruptcy and its subsequent emergence from bankruptcy on February 16, 2024, we determined the collectability of amounts owed under the contractual terms of GenesisCare's lease were no longer reasonably assured.
Added
We encourage our shareholders and others interested in our company to monitor these distribution channels for material disclosures. The contents of our website address referenced herein is included in this Annual Report on Form 10-K as a textual reference only and is not incorporated by reference into this Annual Report on Form 10-K.
Removed
Results of Operations Our results of operations are influenced by the timing of acquisitions and the performance of our real estate properties.
Added
Recent Developments New York Stock Exchange Listing and Reverse Stock Split On June 13, 2024, our Common Stock was listed and began trading on the NYSE under the ticker symbol "SILA".
Removed
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following table allocates total rental revenue for the year ended December 31, 2023 compared to the comparable period in 2022 (amounts in thousands).
Added
Upon the Listing, all outstanding shares of Class I Common Stock and Class T Common Stock were automatically converted into shares of Class A Common Stock on a one-for-one basis and authorized but unissued shares of Class I Common Stock, Class T Common Stock and Class T2 Common Stock were reclassified into additional shares of Class A Common Stock.
Removed
We expect to pay distributions to our stockholders from cash flows from operations; however, we have used, and may continue to use, other sources to fund distributions, as necessary, such as funds equal to amounts reinvested in the DRIP.
Added
Class A Common Stock was then immediately renamed “Common Stock” and is the sole class of stock traded on the NYSE.
Removed
We currently meet these conditions and therefore may exercise our option to extend the maturity date if we so choose.
Added
On April 8, 2024, in anticipation of the Listing, we amended our charter to effect a one-for-four reverse stock split, or the Reverse Stock Split, of each issued and outstanding share of each class of our Common Stock, effective May 1, 2024, and we also amended our charter to decrease the par value of each issued and outstanding share of our Common Stock from $0.04 par value per share to $0.01 par value per share immediately after the Reverse Stock Split.
Removed
Investing Activities Significant investing activities included: • Investment of $69,822,000 to purchase two properties during the year ended December 31, 2023, compared to an investment of $157,194,000 to purchase seven properties during the year ended December 31, 2022. • Sale of three properties for net proceeds of $270,306,000 during the year ended December 31, 2023, compared to receiving $22,822,000 from the sale of a land parcel that formerly contained a property during the year ended December 31, 2022. 34 Table of Contents • Incurred capital expenditures, primarily for tenant improvements, of $3,177,000 during the year ended December 31, 2023, compared to incurring $8,440,000 during the year ended December 31, 2022.
Added
In addition, equitable adjustments were made to the maximum number of shares of our Common Stock that may be issued pursuant to the A&R Incentive Plan to reflect the Reverse Stock Split. The number of shares of our Common Stock subject to outstanding awards under the A&R Incentive Plan were also equitably adjusted to reflect the Reverse Stock Split.
Removed
The following table shows the sources of distributions paid during the years ended December 31, 2023 and 2022 (amounts in thousands): Year Ended December 31, 2023 2022 Distributions paid in cash - common stockholders $ 66,515 $ 65,310 Distributions reinvested (shares issued) 24,751 24,834 Total distributions $ 91,266 $ 90,144 Source of distributions: Cash flows provided by operations $ 66,515 73 % (1) $ 65,310 72 % (1) Offering proceeds from issuance of common stock pursuant to the DRIP 24,751 27 % (1) 24,834 28 % (1) Total sources $ 91,266 100 % $ 90,144 100 % (1) Percentages were calculated by dividing the respective source amount by the total sources of distributions.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeMarket risk is the adverse effect on the value of a financial instrument that results from a change in interest rates. We manage the market risk associated with 38 Table of Contents interest rate contracts by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.
Biggest changeWhen the fair value of a derivative contract is negative, we owe the counterparty and, therefore, it does not possess credit risk. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates.
In addition to changes in interest rates, the value of our future investments will be subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of tenants, which may affect our ability to refinance our debt, if necessary.
We may also enter into rate-lock arrangements to lock interest rates on future borrowings. In addition to changes in interest rates, the value of our future investments will be subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of tenants, which may affect our ability to refinance our debt, if necessary.
As of December 31, 2023, our total principal debt outstanding of $525,000,000 was fixed through 11 interest rate swap agreements, which mature on various dates from December 2024 to January 2028. As of December 31, 2023, the interest rate swap agreements had an aggregate notional amount of $525,000,000 and an aggregate settlement asset value of $18,182,000.
As of December 31, 2023, our total principal debt outstanding of $525,000,000 was fixed through 11 interest rate swap agreements, which mature, or matured, on various dates from December 31, 2024 to January 31, 2028.
Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. When the fair value of a derivative contract is negative, we owe the counterparty and, therefore, it does not possess credit risk.
To the extent we do, we are exposed to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us.
The settlement value of these interest rate swap agreements is dependent upon existing market interest rates and swap spreads. As of December 31, 2023, an increase of 50 basis points in the market rates of interest would have resulted in an increase to the settlement asset value of these interest rate swaps to a value of $24,111,000.
As of December 31, 2024, an increase of 50 basis points in the market rates of interest would have resulted in an increase to the settlement asset value of these interest rate swaps to a value of $20,023,000.
We have entered, and may continue to enter, into additional derivative financial instruments, such as interest rate swaps, in order to mitigate our interest rate risk on a given variable rate financial instrument. To the extent we do, we are exposed to credit risk and market risk.
As of December 31, 2024, the weighted average interest rate on our total principal debt outstanding was 4.62%, including the impact of our interest rate swap agreements. We have entered, and may continue to enter, into additional derivative financial instruments, such as interest rate swaps, in order to mitigate our interest rate risk on a given variable rate financial instrument.
We have not entered, and do not intend to enter, into derivative or interest rate swap transactions for speculative purposes. We may also enter into rate-lock arrangements to lock interest rates on future borrowings.
We manage the market risk associated with interest rate contracts by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. We have not entered, and do not intend to enter, into derivative or interest rate swap transactions for speculative purposes.
These interest rate swap agreements were designated as cash flow hedging instruments. As of December 31, 2023, the weighted average interest rate on our total debt outstanding was 3.3%.
As of December 31, 2024, a decrease of 50 basis points in the market rates of interest would have resulted in a decrease to the settlement asset value of these interest rate swaps to a value of $3,311,000. These interest rate swap agreements were designated as cash flow hedging instruments.
Added
On November 27, 2024, we entered into two interest rate swap agreements, which have an effective date of December 31, 2024 and an aggregate notional amount of $150,000,000. Additionally, on December 6, 2024, we entered into two interest rate swap agreements, which have an effective date of December 31, 2024 and an aggregate notional amount of $100,000,000.
Added
The four swaps have a maturity date of March 20, 2029, and were entered into to replace five interest rate swaps with an aggregate notional amount of $250,000,000 that matured on December 31, 2024. 43 Table of Contents As of December 31, 2024, our total principal debt outstanding of $525,000,000 was fixed through 10 interest rate swap agreements, of which six mature on January 31, 2028 and four mature on March 20, 2029.
Added
As of December 31, 2024, the interest rate swap agreements had an aggregate notional amount of $525,000,000 and an aggregate settlement asset value of $11,764,000. The settlement value of these interest rate swap agreements is dependent upon existing market interest rates and swap spreads.
Added
See Note 9—"Credit Facility" and Note 12—"Derivative Instruments and Hedging Activities" in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for more information about the impacts of our interest rate swaps on our outstanding debt and for more information about our interest rate swaps.

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