September 2023

Woodlands Medical Arts Center

The Woodlands, TX

SUPPLEMENTAL OPERATING & FINANCIAL INFORMATION

THIRD QUARTER 2023

PHYSICIANS REALTY TRUST

NYSE: DOC

Northside Medical Midtown

Atlanta, GA

TABLE OF CONTENTS

ABOUT PHYSICIANS REALTY TRUST

4

CONSOLIDATED BALANCE SHEETS

6

CONSOLIDATED STATEMENTS OF INCOME

7

THIRD QUARTER 2023 HIGHLIGHTS

8

FINANCIAL HIGHLIGHTS

9

RECONCILIATION OF NON-GAAP MEASURES: FUNDS FROM OPERATIONS ("FFO"), NORMALIZED

FUNDS FROM OPERATIONS ("NORMALIZED FFO"), AND NORMALIZED FUNDS AVAILABLE FOR

DISTRIBUTION ("NORMALIZED FAD")

10

RECONCILIATION OF NON-GAAP MEASURES: NET OPERATING INCOME AND ADJUSTED EBITDAre

11

MARKET CAPITALIZATION AND DEBT SUMMARY

12

LEVERAGE STATISTICS AND COVENANT PERFORMANCE

13

INVESTMENT ACTIVITY AND CONSTRUCTION LOAN SUMMARY

14

PORTFOLIO PERFORMANCE

15

LEASING ROLLFORWARD AND CAPITAL EXPENDITURES

16

PORTFOLIO DIVERSIFICATION

17

CONSOLIDATED LEASING RELATIONSHIPS AND EXPIRATION SCHEDULE

18

REPORTING DEFINITIONS

19

2

FORWARD-LOOKING STATEMENTS

Certain statements made in this supplemental information package constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act")). In particular, statements pertaining to our capital resources, portfolio performance and results of operations contain forward-looking statements. Likewise, our pro forma financial statements and our statements regarding anticipated market conditions are forward-looking statements. You can identify forward-looking statements by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," "seeks," "approximately," "intends," "plans," "outlook," "continue," "projects," "pro forma," "estimates" or "anticipates" or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans, expectations, or intentions.

Forward-looking statements reflect the views of our management regarding current expectations and projections about future events and are based on currently available information. These forward-looking statements are not guarantees of future performance and involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data, or methods which may be incorrect or imprecise and we may not be able to realize them.

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes after the date of this supplemental information package, except as required by applicable law. You should not place undue reliance on any forward-looking statements that are based on information currently available to us or the third parties making the forward-looking statements. For a discussion of factors that could impact our future results, performance or transactions, see Part I, Item 1A (Risk Factors) of our Annual Report on Form

10-K for the fiscal year ended December 31, 2022 and Part II, Item 1A (Risk Factors) of our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023.

NON-GAAP FINANCIAL MEASURES

This presentation includes EBITDAre, Adjusted EBITDAre, Net Operating Income (or "NOI"), Cash NOI, Outpatient Medical Same-Store Cash NOI, Funds From Operations (or "FFO"), Normalized FFO, and Normalized Funds Available For Distribution (or "FAD"), which are non-GAAP financial measures. For purposes of the Securities and Exchange Commission's ("SEC")

Regulation G, a non-GAAP financial measure is a numerical measure of a company's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable financial measure calculated and presented in accordance with GAAP in the statements of operations, balance sheets or statements of cash flows (or equivalent statements) of the company, or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable financial measure so calculated and presented. As used in this presentation, GAAP refers to generally accepted accounting principles in the United States of America. Our use of the non-GAAP financial measure terms herein may not be comparable to that of other real estate investment trusts. Pursuant to the requirements of Regulation G, we have provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

ADDITIONAL INFORMATION

The information in this supplemental information package should be read in conjunction with the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, earnings press release dated October 30, 2023, and other information filed with, or furnished to, the SEC. You can access the Company's reports and amendments to those reports filed or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act in the "Investor Relations" section on the Company's website (www.docreit.com) under the tab "SEC Filings" as soon as reasonably practicable after they are filed with, or furnished to, the SEC. The information on or connected to the Company's website is not, and shall not be deemed to be, a part of, or incorporated into this supplemental information package. You also can review these SEC filings and other information by accessing the SEC's website at http://www.sec.gov.

3

ABOUT PHYSICIANS REALTY TRUST

Physicians Realty Trust (NYSE:DOC) (the "Trust," the "Company," "DOC," "we," "our" and "us") is a self-managed health care real estate company organized in 2013 to acquire, selectively develop, own, and manage health care properties that are leased to physicians, hospitals, and health care delivery systems.

We invest in real estate that is integral to providing high quality health care services. Our properties typically are on a campus with a hospital or other health care facilities or strategically located and affiliated with a hospital or other health care facilities.

Our management team has significant public health care REIT experience and long established relationships with physicians, hospitals, and health care delivery system decision makers that we believe will provide quality investment opportunities to generate attractive risk-adjusted returns to our shareholders.

We are a Maryland real estate investment trust and elected to be taxed as a REIT for U.S. federal income tax purposes. We conduct our business through an UPREIT structure in which our properties are owned by Physicians Realty L.P., a Delaware limited partnership (the "operating partnership"), directly or through limited partnerships, limited liability companies, or other subsidiaries. We are the sole general partner of the operating partnership and, as of September 30, 2023, owned approximately 96.1% of the partnership interests in the operating partnership ("OP Units").

Unless otherwise indicated, portfolio statistics include amounts attributable to the Company's pro-rata share of unconsolidated joint venture assets and exclude the Company's 108,843 square foot corporate office and one 20,840 square foot retail asset.

COMPANY SNAPSHOT

As of

September 30, 2023

Gross real estate investments (thousands) Total health care properties

% Leased

Total portfolio gross leasable area (sq. ft.)

  • 6,011,198
    291

94.6%

16,252,156

% of consolidated GLA from outpatient medical facilities

98%

% of GLA on-campus / affiliated

90%

Weighted average remaining lease term for all health care properties (years)

5.3

Cash and cash equivalents (thousands)

$

195,772

Net consolidated debt to firm value

35.6%

Weighted average interest rate per annum on consolidated debt

4.1%

Equity market cap (thousands)

$

2,907,105

Quarterly dividend

$

0.23

Quarter end stock price

$

12.19

Dividend yield

7.55%

Common shares outstanding

238,482,769

OP Units outstanding and not owned by DOC

9,814,502

Dilutive restricted common shares and units

1,150,717

Consolidated firm value (thousands)

$

5,031,964

4

ABOUT PHYSICIANS REALTY TRUST (CONTINUED)

BOARD OF TRUSTEES

Tommy G. Thompson Chairman

John T. Thomas President, Chief Executive Officer

Stanton D. Anderson, Esq. Compensation Committee Chair

Mark A. Baumgartner Audit Committee Chair

Albert C. Black Nominating and Corporate Governance Committee Chair

William A. Ebinger, M.D. Trustee

Pamela J. Kessler Trustee

Ava E. Lias-Booker, Esq. Trustee

Richard A. Weiss, Esq. Finance and Investment Committee Chair

MANAGEMENT TEAM

John T. Thomas President, Chief Executive Officer

Jeffrey N. Theiler Executive Vice President, Chief Financial Officer

D. Deeni Taylor Executive Vice President, Chief Investment Officer

Mark D. Theine Executive Vice President, Asset & Investment Management

John W. Lucey Chief Accounting and Administrative Officer

Daniel M. Klein Senior Vice President, Deputy Chief Investment Officer

Bradley D. Page Senior Vice President, General Counsel

Laurie P. Becker Senior Vice President, Controller

Amy M. Hall Senior Vice President, Leasing & Physician Strategy

W. Mark Dukes Senior Vice President, Asset Management

LOCATION AND CONTACT INFORMATION

Corporate Headquarters

Independent Registered

Corporate and REIT Tax Counsel

309 N. Water Street, Suite 500

Public Accounting Firm

Baker & McKenzie LLP

Milwaukee, WI 53202

Ernst & Young

Richard Lipton, Senior Counsel

(414) 367-5600

Milwaukee, WI 53202

Chicago, IL 60601

(414) 273-5900

(312) 861-8000

COVERING ANALYSTS

J. Dennerlein - Bank of America Merrill Lynch

A. Hecht - JMP Securities LLC

S. Valiquette - Barclays

A. Wurschmidt - Keybanc Capital Markets Inc.

J. Sanabria - BMO Capital Markets Corp.

R. Kamdem - Morgan Stanley

M. Gorman - BTIG

J. Hughes - Raymond James Financial Inc.

M. Griffin - Citi

M. Carroll - RBC Capital Markets LLC

D. Toti - Colliers Securities

W. Golladay - Robert W. Baird & Co.

M. Ross - Compass Point

S. Manaker - Stifel

J. Pawlowski - Green Street

M. Lewis - Truist Securities

M. Mueller - J.P. Morgan

C. Siversky - Wells Fargo

J. Petersen - Jefferies LLC

The equity analysts listed above are those analysts that have published research material on the Company and are listed as covering the Company. Please note that any opinions, estimates, or forecasts regarding the Company's performance made by the analysts listed above do not represent the opinions, estimates, or forecasts of the Company or its management. The Company does not by its reference above imply its endorsement of or concurrence with any information, conclusions or recommendations made by any of such analysts. Interested persons may obtain copies of analysts' reports on their own, as we do not distribute these reports. Several of these firms may, from time to time, own our stock and/or hold other long or short positions on our stock, and may provide compensated services to us.

5

CONSOLIDATED BALANCE SHEETS (In thousands, except share data)

September 30,

December 31,

2023

2022

ASSETS

(unaudited)

Investment properties:

Land and improvements

$

249,468

$

241,559

Building and improvements

4,703,606

4,659,780

Construction in progress

41,722

18,497

Tenant improvements

95,447

88,640

Acquired lease intangibles

509,468

505,335

5,599,711

5,513,811

Accumulated depreciation

(1,140,208)

(996,888)

Net real estate property

4,459,503

4,516,923

Right-of-use lease assets, net

227,967

231,225

Real estate loans receivable, net

79,883

104,973

Investments in unconsolidated entities

72,069

77,716

Net real estate investments

4,839,422

4,930,837

Cash and cash equivalents

195,772

7,730

Tenant receivables, net

11,131

11,503

Other assets

166,142

146,807

Total assets

$

5,212,467

$

5,096,877

LIABILITIES AND EQUITY

Liabilities:

Credit facility

$

393,090

$

188,328

Notes payable

1,451,536

1,465,437

Mortgage debt

127,630

164,352

Accounts payable

4,933

4,391

Dividends and distributions payable

60,928

60,148

Accrued expenses and other liabilities

95,637

87,720

Lease liabilities

104,802

105,011

Acquired lease intangibles, net

23,170

24,381

Total liabilities

2,261,726

2,099,768

Redeemable noncontrolling interests - partially owned properties

3,066

3,258

Equity:

Common shares, $0.01 par value, 500,000,000 common shares authorized, 238,482,769 and 233,292,030 common

2,385

2,333

shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

Additional paid-in capital

3,817,545

3,743,876

Accumulated deficit

(1,012,869)

(881,672)

Accumulated other comprehensive income

15,216

5,183

Total shareholders' equity

2,822,277

2,869,720

Noncontrolling interests:

Operating Partnership

116,079

123,015

Partially owned properties

9,319

1,116

Total noncontrolling interests

125,398

124,131

Total equity

2,947,675

2,993,851

Total liabilities and equity

$

5,212,467

$

5,096,877

6

CONSOLIDATED STATEMENTS OF INCOME (Unaudited and in thousands, except share and per share data)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2023

2022

2023

2022

Revenues:

Rental revenues

$

94,744

$

92,073

$

281,901

$

278,230

Expense recoveries

39,776

36,563

115,195

107,525

Rental and related revenues

134,520

128,636

397,096

385,755

Interest income on real estate loans and other

4,027

2,877

10,895

8,315

Total revenues

138,547

131,513

407,991

394,070

Expenses:

Interest expense

20,050

18,299

59,837

52,356

General and administrative

9,771

10,079

31,133

30,400

Operating expenses

47,625

43,647

138,094

128,080

Depreciation and amortization

47,932

47,040

143,555

142,002

Total expenses

125,378

119,065

372,619

352,838

Income before equity in (loss) gain of unconsolidated entities and

13,169

12,448

35,372

41,232

gain on sale of investment properties, net:

Equity in (loss) gain of unconsolidated entities

(278)

(62)

1,260

(452)

Gain on sale of investment properties, net

-

53,894

13

57,375

Net income

12,891

66,280

36,645

98,155

Net income attributable to noncontrolling interests:

Operating Partnership

(505)

(3,252)

(1,443)

(4,830)

Partially owned properties (1)

(51)

(70)

(121)

(384)

Net income attributable to common shareholders

$

12,335

$

62,958

$

35,081

$

92,941

Net income per share:

Basic

$

0.05

$

0.28

$

0.15

$

0.41

Diluted

$

0.05

$

0.28

$

0.15

$

0.41

Weighted average common shares:

Basic

238,480,299

226,529,041

238,124,981

225,743,856

Diluted

249,445,312

239,898,462

249,226,913

239,145,383

Dividends and distributions declared per common share

$

0.23

$

0.23

$

0.69

$

0.69

(1) Includes amounts attributable to redeemable noncontrolling interests.

7

THIRD QUARTER 2023 HIGHLIGHTS

OPERATING HIGHLIGHTS

  • Third quarter 2023 total revenue of $138.5 million, an increase of 5.3% compared to the prior year period
  • Third quarter 2023 rental and related revenue of $134.5 million, an increase of 4.6% compared to the prior year period
  • Reported net income of $12.9 million for the quarter ended September 30, 2023, a decrease of 80.6% over the prior year period due to a $53.9 million net gain on the sale of investment properties in the prior period, and third quarter net income per share of $0.05 on a fully diluted basis
  • Generated quarterly normalized funds from operations ("Normalized FFO") of $0.25 per share on a fully diluted basis
  • Third quarter Outpatient Medical Same-Store Cash Net Operating Income ("Cash NOI") growth of 1.5% year-over-year
  • Declared quarterly dividend of $0.23 per share for the third quarter
  • Third quarter weighted average leasing spread was 6.7% on 210,847 renewed square feet with 77% tenant retention on our consolidated portfolio
  • Third quarter leasing activity on our consolidated portfolio had positive net absorption of 23,904 square feet
  • 94.6% of portfolio square footage leased as of September 30, 2023

COMPANY ANNOUNCEMENTS

  • September 21, 2023: Announced that our Board of Trustees authorized and declared a cash distribution of $0.23 per common share and OP Unit for the quarterly period ended September 30, 2023. The distribution was paid on October 17, 2023, to common shareholders and OP Unit holders of record as of the close of business on October 3, 2023.
  • October 2023: The Company earned a score of 78 out of 100 (representing a 4% year-over-year scoring increase) and a Green Star designation in the 2023 GRESB Real Estate Assessment for sustainability reporting. The Company also earned a score of 98 out of 100 and an "A" rating for its GRESB Public Disclosure Level, ranking first in our health care comparison group. The Company also earned a ranking of 2 out of 6 in a customized GRESB peer group scoring comprised of U.S.-based listed outpatient medical REITs.

THIRD QUARTER INVESTMENT HIGHLIGHTS

  • Palos Heights Surgery Center, Palos Heights, IL ($2.6 million)

HEB Cancer Center

St. Vincent Fishers Medical Center

Bedford, TX

Fishers, IN

8

FINANCIAL HIGHLIGHTS

(Unaudited and in thousands, except sq. ft. and per share data)

INCOME

Three Months Ended

September 30, 2023

June 30, 2023

Revenues

$

138,547

$

135,100

Net income

12,891

13,085

NOI

91,820

93,585

Annualized Adjusted EBITDAre

350,468

348,176

Net income available to common shareholders per common share

$

0.05

$

0.05

Normalized FFO

61,244

61,175

Normalized FFO per common share

$

0.25

$

0.25

Normalized FAD

60,066

60,177

CAPITALIZATION

As of

ASSETS

September 30, 2023

June 30, 2023

Gross Real Estate Investments (including gross lease intangibles)

6,011,198

5,997,402

Total Assets

5,212,467

5,279,538

DEBT AND EQUITY

Consolidated Debt (1)

1,988,127

2,024,427

Total Equity

2,947,675

2,982,859

Equity Market Capitalization

2,907,105

3,335,941

Consolidated Firm Value

5,031,964

5,514,978

Consolidated Debt / Total Firm Value

39.5%

36.7%

  1. Unadjusted for unamortized fair value adjustments, unamortized discount, and unamortized deferred financing costs.
    Portfolio Growth Since IPO

$6,011,198

$6,000,000

18,000,000

Gross Real Estate Investments

$5,000,000

15,000,000

$4,000,000

12,000,000

Gross Leasable Area

$3,000,000

9,000,000

$2,000,000

6,000,000

$1,000,000

3,000,000

$123,998

$0

2013

2014

2015

2016

2017

2018

2019

2020

2021

0

IPO

2022

Q3

2023

Gross Real Estate Assets

Gross Real Estate Investments/Year

Portfolio GLA

9

RECONCILIATION OF NON-GAAP MEASURES: FUNDS FROM OPERATIONS ("FFO"),

NORMALIZED FUNDS FROM OPERATIONS ("NORMALIZED FFO"),

AND NORMALIZED FUNDS AVAILABLE FOR DISTRIBUTION ("NORMALIZED FAD") (Unaudited and in thousands, except share and per share data)

Three Months Ended

Three Months Ended

September 30, 2023

September 30, 2022

Net income

$

12,891

$

66,280

Net income attributable to noncontrolling interests - partially owned properties

(51)

(70)

Depreciation and amortization expense

47,843

46,939

Depreciation and amortization expense - partially owned properties

(132)

(101)

Gain on the sale of investment properties, net

-

(53,894)

Proportionate share of unconsolidated joint venture adjustments

2,271

2,298

FFO applicable to common shares

$

62,822

$

61,452

Net change in fair value of derivative

185

-

Gain on extinguishment of debt

(1,763)

-

Proportionate share of unconsolidated joint venture adjustments

-

(82)

Normalized FFO applicable to common shares

$

61,244

$

61,370

Net income available to common shareholders per common share

$

0.05

$

0.28

FFO per common share - diluted

$

0.25

$

0.26

Normalized FFO per common share - diluted

$

0.25

$

0.26

Normalized FFO applicable to common shares

$

61,244

$

61,370

Non-cash share compensation expense

3,968

4,349

Straight-line rent adjustments

(820)

(1,478)

Amortization of acquired above/below market leases/assumed debt

1,084

1,133

Amortization of lease inducements

246

225

Amortization of deferred financing costs

763

581

Recurring capital expenditures and lease commissions

(5,745)

(4,129)

Loan reserve adjustments

265

152

Proportionate share of unconsolidated joint venture adjustments

(939)

(403)

Normalized FAD applicable to common shares

$

60,066

$

61,800

Weighted average common shares outstanding - diluted

249,445,312

239,898,462

10

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Physicians Realty Trust published this content on 30 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 October 2023 11:05:00 UTC.