EX-99.2 3 exhibit992-q32021earning.htm EX-99.2 exhibit992-q32021earning
EXHIBIT 99.2


 
This presentation contains certain financial information not derived in accordance with the United States generally accepted accounting principles (GAAP). These items include, but are not limited to, earnings before interest, income taxes, depreciation and amortization (EBITDA), EBITDA for real estate (EBITDAre); funds from operations (FFO); adjusted funds from operations (AFFO); interest expense, adjusted; liquidity; net debt; net operating income (NOI); and cash NOI. These measures (and the methodologies used to derive them) may not be comparable to those used by other companies. Refer to the glossary for a detailed explanation of these terms and reconciliations to the most directly comparable GAAP measure, as well as others appearing in the supplement. Management considers each item an important supplemental measure of operating and financial performance and believes they are frequently used by interested parties in the evaluation of real estate investment trusts. These measures should not be considered as alternatives, or superior measures, to net income or loss as an indicator of the company's performance and should be considered only as a supplement to net income or loss and cash flows from operating, investing or financing activities as measures of profitability and/or liquidity, computed in accordance with GAAP. All quarterly information presented in this supplement is unaudited and should be read in conjunction with the company’s audited consolidated financial statements (and the notes thereto) included in the Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on March 24, 2021. Certain statements contained herein, other than historical fact, including the anticipated completion of the Tucson Healthcare Facility IV, may be considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provided by the same. These statements are based on management’s current expectations and beliefs and are subject to a number of trends and uncertainties. No forward-looking statement is intended to, nor shall it, serve as a guarantee of future performance. You can identify the forward-looking statements by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will” and other similar terms and phrases, including references to assumptions and forecasts of future results and to the anticipated development properties, including the Tucson Healthcare Facility IV. Forward-looking statements are subject to various risks and uncertainties and factors that could cause actual results to differ materially from the company’s expectations, and investors should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond the company’s control and could materially affect the company’s results of operations, financial condition, cash flows, performance or future achievements or events, including those described under the section entitled Part I, Item 1A. “Risk Factors” of the company's 2020 Annual Report on Form 10-K. The company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. Disclosures Forward Looking Statements Non-GAAP Measures Unaudited Financial Information Q3 2021 See the glossary for a description of the company's non-GAAP financial and operating metrics. Information About the Sale of the Data Center Properties Prior to the second quarter of 2021, the company operated through two reportable business segments— real estate investments in data centers and healthcare. During the three months ended June 30, 2021, the company's board of directors made a determination to sell the company's data center assets. On May 19, 2021, the company and certain of its wholly-owned subsidiaries entered into a purchase and sale agreement for the sale of up to 29 data center properties, which constituted the entirety of the company's data center segment. On July 22, 2021, the company completed the sale of its 29 data center properties. The company has classified the assets in its data center segment as held for sale on the condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, and a part of discontinued operations on the condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2021 and 2020.


 
Section Page Supplemental Information as of September 30, 2021 See the glossary for a description of the company's non-GAAP financial and operating metrics. Corporate Address 4890 W. Kennedy Blvd Suite 650 Tampa, FL 33609 Transfer Agent By Regular Mail: Computershare Alternative Investments P.O. Box 43007 Providence, RI 02940-3007 By Overnight Delivery: Computershare Alternative Investments 150 Royall Street, Suite 101 Canton, MA 02021 Contact Information Investor Support 833-404-4107 Miles Callahan, Vice President of Capital Markets and Investor Relations www.silarealtytrust.com Q3 2021 Quarterly Financial Summary .................................................... 3 Financial Statistics and Ratios .................................................... 4 Condensed Consolidated Balance Sheets .................................. 5 Condensed Consolidated Statements of Comprehensive Income ....................................................................................... 6 FFO and AFFO ............................................................................. 7 EBITDA and EBITDAre ................................................................ 8 Net Operating Income (NOI) ...................................................... 9 Same Store NOI and Occupancy Trends .................................... 10 Debt ............................................................................................ 11 Acquisitions and Dispositions .................................................... 12 Property Map ............................................................................. 13 Diversification Statistics ............................................................. 14 Portfolio ..................................................................................... 16 Glossary ...................................................................................... 20


 
Three Months Ended Financial Results September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 Rental revenue $ 43,063 $ 43,747 $ 42,422 $ 41,902 $ 40,722 (Loss) Income from continuing operations $ (5,546) $ (249) $ (5,066) $ 6,509 $ (581) Income from discontinued operations $ 377,191 $ 16,305 $ 7,948 $ 8,239 $ 5,845 Net income attributable to common stockholders $ 371,645 $ 16,056 $ 2,882 $ 14,748 $ 5,264 Net income attributable to common stockholders per diluted share $ 1.66 $ 0.07 $ 0.01 $ 0.07 $ 0.02 EBITDAre $ 37,444 $ 57,082 $ 51,406 $ 52,042 $ 46,815 FFO attributable to common stockholders $ 615 $ 44,150 $ 39,267 $ 39,178 $ 33,512 FFO attributable to common stockholders per diluted share $ — $ 0.20 $ 0.18 $ 0.18 $ 0.15 AFFO attributable to common stockholders $ 27,708 $ 41,335 $ 36,143 $ 35,208 $ 28,972 AFFO attributable to common stockholders per diluted share $ 0.12 $ 0.19 $ 0.16 $ 0.16 $ 0.13 Weighted average shares outstanding - diluted 223,661,774 223,082,912 222,481,179 222,475,926 221,346,730 As of Portfolio Metrics2 September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 Number of properties1 125 154 153 153 153 Rentable square feet (in thousands) 5,298 8,595 8,542 8,480 8,659 Weighted average rent escalation 2.3% 2.4% 2.4% 2.4% 2.4% Weighted average occupancy 96.0% 93.3% 93.3% 93.0% 94.1% Weighted average remaining lease term 9.8 years 9.3 years 9.4 years 9.6 years 9.5 years The following tables summarize the company's quarterly financial results and portfolio metrics. 3 Page Quarterly Financial Summary (dollars in thousands, except share data and per share amounts) See the glossary for a description of the company's non-GAAP financial and operating metrics. Q3 2021 (1) Includes development property. (2) Data as of June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020 includes data center properties that were sold on July 22, 2021.


 
Three Months Ended Adjusted Interest Coverage Ratio September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 Interest expense, adjusted $ 37,386 6 $ 13,377 $ 13,208 $ 13,886 $ 13,768 EBITDA 425,761 50,574 40,979 52,472 46,797 Adjusted interest coverage ratio 11.4 x 3.8 x 3.1 x 3.8 x 3.4 x As of Net Debt Ratios September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 Principal debt outstanding $ 520,000 $ 1,404,184 $ 1,390,298 $ 1,391,422 $ 1,437,523 Less: cash and cash equivalents 75,363 47,921 51,039 53,174 75,505 Net debt 444,637 1,356,263 1,339,259 1,338,248 1,362,018 EBITDAre annualized2 149,776 228,328 205,624 208,168 187,260 Net debt to EBITDAre ratio 3.0 x 5.9 x 6.5 x 6.4 x 7.3 x Net debt $ 444,637 $ 1,356,263 $ 1,339,259 $ 1,338,248 $ 1,362,018 Fair market value of real estate investments 2,282,706 3,550,273 3,259,303 3,256,885 3,237,009 Net debt leverage ratio 19.5 % 38.2 % 41.1 % 41.1 % 42.1 % Financial Metrics September 30, 2021 Other Key Metrics September 30, 2021 Net debt leverage ratio 19.5 % Total real estate investment $ 2,237,610 Net debt to EBITDAre ratio 3.0 x Net asset value per share4,5 $ 8.20 Adjusted interest coverage ratio 11.4 x Class A annualized distribution per share $ 0.40 Liquidity3 $ 575,363 Class I annualized distribution per share $ 0.40 Class T annualized distribution per share $ 0.32 Class T2 annualized distribution per share $ 0.32 Financial Statistics and Ratios1 (dollars in thousands, except per share amounts) See the glossary for a description of the company's non-GAAP financial and operating metrics. 4 Page (1) Data for the three months ended September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020 includes data center properties that were sold on July 22, 2021. (2) EBITDAre is annualized based on actual quarter EBITDAre. (3) Liquidity represents cash and cash equivalents of $75.4 million and borrowing base availability on the company’s credit facility of $500.0 million as of September 30, 2021. (4) The estimated net asset value per share was calculated as of May 31, 2021. (5) On July 20, 2021, the company's board of directors approved an updated estimated net asset value per share, of $9.95 of the company's common stock as of May 31, 2021. The special cash distribution reduces the estimated net asset value per share by $1.75, resulting in a new estimated net asset value per share of $8.20, effective July 26, 2021. (6) Includes one-time costs associated with the sale of the data center portfolio, inclusive of defeasance and other loan costs in the amount of $26.1 million. Q3 2021


 
(Unaudited) September 30, 2021 December 31, 2020 ASSETS Real estate: Land $ 159,777 $ 168,969 Buildings and improvements, less accumulated depreciation of $153,734 and $119,947, respectively 1,628,363 1,661,351 Construction in progress 12,053 19,232 Total real estate, net 1,800,193 1,849,552 Cash and cash equivalents 75,363 53,174 Acquired intangible assets, less accumulated amortization of $65,534 and $49,866, respectively 182,688 197,901 Goodwill 23,284 23,955 Right-of-use assets - operating leases 22,101 22,499 Right-of-use assets - finance leases 2,301 2,527 Notes receivable, net 2,200 31,262 Other assets, net 61,456 64,669 Assets held for sale, net 30,620 959,750 Total assets $ 2,200,206 $ 3,205,289 LIABILITIES AND STOCKHOLDERS’ EQUITY Liabilities: Notes payable, net of deferred financing costs of $0 and $682, respectively $ — $ 146,645 Credit facility, net of deferred financing costs of $3,494 and $5,900, respectively 516,506 932,100 Accounts payable and other liabilities 40,572 67,946 Acquired intangible liabilities, less accumulated amortization of $4,101 and $3,122, respectively 12,546 11,971 Operating lease liabilities 23,975 23,926 Finance lease liabilities 2,634 2,843 Liabilities held for sale, net 2,369 365,985 Total liabilities 598,602 1,551,416 Stockholders’ equity: Preferred stock, $0.01 par value per share, 100,000,000 shares authorized; none issued and outstanding — — Common stock, $0.01 par value per share, 510,000,000 shares authorized; 237,511,555 and 234,957,801 shares issued, respectively; 223,826,695 and 222,045,522 shares outstanding, respectively 2,238 2,220 Additional paid-in capital 2,000,934 1,983,361 Accumulated distributions in excess of earnings (390,932) (311,264) Accumulated other comprehensive loss (10,636) (20,444) Total stockholders’ equity 1,601,604 1,653,873 Total liabilities and stockholders’ equity $ 2,200,206 $ 3,205,289 Condensed Consolidated Balance Sheets (dollars in thousands, except share data) See the glossary for a description of the company's non-GAAP financial and operating metrics. 5 Page Q3 2021


 
Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenue: Rental revenue $ 43,063 $ 40,722 $ 129,232 $ 123,879 Expenses: Rental expenses 3,024 4,405 9,513 12,639 General and administrative expenses 6,348 3,578 19,610 9,960 Internalization transaction expenses — 2,235 — 3,640 Asset management fees — 4,218 — 12,604 Depreciation and amortization 17,259 17,002 53,098 52,714 Impairment loss on real estate 10,241 — 27,166 — Impairment loss on goodwill — — 671 — Total expenses 36,872 31,438 110,058 91,557 Gain on real estate disposition — — — 2,703 Income from operations 6,191 9,284 19,174 35,025 Interest and other expense, net 11,737 9,865 30,035 32,597 (Loss) income from continuing operations (5,546) (581) (10,861) 2,428 Income from discontinued operations 377,191 5,845 401,444 19,600 Net income attributable to common stockholders $ 371,645 $ 5,264 $ 390,583 $ 22,028 Other comprehensive income (loss): Unrealized income (loss) on interest rate swaps, net $ 2,241 $ 2,584 $ 9,808 $ (18,890) Other comprehensive income (loss) 2,241 2,584 9,808 (18,890) Comprehensive income attributable to common stockholders $ 373,886 $ 7,848 $ 400,391 $ 3,138 Weighted average number of common shares outstanding: Basic 223,661,774 221,346,730 223,079,613 221,293,405 Diluted 223,661,774 221,346,730 223,079,613 221,335,874 Net (loss) income per common share attributable to common stockholders: Basic: Continuing operations $ (0.03) $ (0.01) $ (0.05) $ 0.01 Discontinued operations 1.69 0.03 1.80 0.09 Net income attributable to common stockholders $ 1.66 $ 0.02 $ 1.75 $ 0.10 Diluted: Continuing operations $ (0.03) $ (0.01) $ (0.05) $ 0.01 Discontinued operations 1.69 0.03 1.80 0.09 Net income attributable to common stockholders $ 1.66 $ 0.02 $ 1.75 $ 0.10 Distributions declared per common share $ 1.86 $ 0.12 $ 2.11 $ 0.36 Condensed Consolidated Statements of Comprehensive Income (unaudited; dollars in thousands, except share data and per share amounts) See the glossary for a description of the company's non-GAAP financial and operating metrics. 6 Page Q3 2021


 
Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net income attributable to common stockholders $ 371,645 $ 5,264 $ 390,583 $ 22,028 Adjustments: Depreciation and amortization1 17,289 28,248 64,843 80,607 Gain on real estate disposition from continuing operations — — — (2,703) Gain on real estate dispositions from discontinued operations (398,560) — (395,801) — Impairment loss on real estate 10,241 — 27,166 — FFO attributable to common stockholders $ 615 $ 33,512 $ 86,791 $ 99,932 Adjustments: Amortization of intangible assets and liabilities2 13 (2,810) (1,239) (4,067) Reduction in the carrying amount of right-of-use assets - operating leases and finance lease, net 189 235 674 702 Straight-line rent3 (3,414) (5,235) (12,492) (16,146) Internalization transaction expenses4 — 2,235 — 3,640 Amortization of discount of deferred liability 163 — 272 — Impairment loss on goodwill5 — — 671 — Loss on debt extinguishment 28,751 — 28,751 — Amortization of deferred financing costs 754 990 2,761 2,883 Stock-based compensation 637 45 1,756 102 AFFO attributable to common stockholders $ 27,708 $ 28,972 $ 107,945 $ 87,046 Weighted average common shares outstanding - basic 223,661,774 221,346,730 223,079,613 221,293,405 Weighted average common shares outstanding - diluted 223,661,774 221,346,730 223,079,613 221,335,874 Weighted average common shares outstanding - diluted for FFO and AFFO 224,652,226 221,406,461 224,044,442 221,335,874 Net income per common share - basic $ 1.66 $ 0.02 $ 1.75 $ 0.10 Net income per common share - diluted $ 1.66 $ 0.02 $ 1.75 $ 0.10 FFO per common share - basic $ — $ 0.15 $ 0.39 $ 0.45 FFO per common share - diluted $ — $ 0.15 $ 0.39 $ 0.45 AFFO per common share - basic $ 0.12 $ 0.13 $ 0.48 $ 0.39 AFFO per common share - diluted $ 0.12 $ 0.13 $ 0.48 $ 0.39 (dollars in thousands, except share data and per share amounts) FFO and AFFO See the glossary for a description of the company's non-GAAP financial and operating metrics. 7 Page (1) During the three months ended September 30, 2020, the company wrote off in-place intangible assets in the amounts of approximately $3.2 million, by accelerating the amortization of the acquired intangible assets. During the nine months ended September 30, 2021 and 2020, the company wrote off in-place lease intangible assets in the amounts of approximately $1.1 million and $4.7 million, respectively, by accelerating the amortization of the acquired intangible assets. (2) Under GAAP, certain intangibles are accounted for at cost and reviewed for impairment. However, because real estate values and market lease rates historically rise or fall with market conditions, management believes that by excluding charges related to amortization of these intangibles, AFFO provides useful supplemental information on the performance of the real estate. During the nine months ended September 30, 2020, the company wrote off an above-market lease intangible asset in the amount of approximately $0.3 million, by accelerating the amortization of the acquired intangible asset. During the three and nine months ended September 30, 2020, the company wrote off one below-market lease intangible liability in the amount of approximately $2.0 million by accelerating the amortization of the acquired intangible liability. (3) Under GAAP, rental revenue is recognized on a straight-line basis over the terms of the related lease (including rent holidays if applicable). This may result in income recognition that is significantly different than the underlying contract terms. During the nine months ended September 30, 2021, the company wrote off approximately $0.1 million of straight-line rent. During the three and nine months ended September 30, 2020, the company wrote off approximately $0.1 million of straight-line rent. By adjusting for the change in straight-line rent receivable, AFFO may provide useful supplemental information on the realized economic impact of lease terms, providing insight on the expected contractual cash flows of such lease terms, and aligns with its analysis of operating performance. (4) Under GAAP, acquisition fees and expenses related to transactions determined to be business combinations are expensed as incurred. Internalization transaction expenses consisted primarily of legal fees, as well as fees for other professional and financial advisors incurred in connection with the internalization transaction. The company believes that adjusting for such non-recurring items provides useful supplemental information because such expenses may not be reflective of ongoing operations and aligns with its analysis of operating performance. (5) During the nine months ended September 30, 2021, the company wrote off goodwill related to three reporting units in the amount of approximately $0.7 million, which was originally recognized as a part of the internalization transaction on September 30, 2020, as a result of a business combination. The company believes that adjusting for such non-recurring items provides useful supplemental information because such adjustments may not be reflective of ongoing operations and aligns with its analysis of operating performance. Q3 2021


 
Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net income attributable to common stockholders $ 371,645 $ 5,264 $ 390,583 $ 22,028 Adjustments: Interest and other expense, net 36,822 3 13,284 61,874 42,802 Depreciation and amortization 17,294 28,249 64,857 80,608 EBITDA $ 425,761 $ 46,797 $ 517,314 $ 145,438 Gain on real estate disposition from continuing operations — — — (2,703) Gain on real estate dispositions from discontinued operations2 (398,560) — (395,801) — Impairment loss on real estate 10,241 — 27,166 — Cash deposits interest 2 18 12 169 EBITDAre $ 37,444 $ 46,815 $ 148,691 $ 142,904 EBITDA and EBITDAre1 (dollars in thousands) See the glossary for a description of the company's non-GAAP financial and operating metrics. 8 Page Q3 2021 (1) Includes the 29 data center properties sold on July 22, 2021. (2) Represents gain on real estate dispositions related to the data center sale that occurred on July 22, 2021. The company recognized $2.8 million in transaction costs during the second quarter of 2021, resulting in the total gain being higher during the three months ended September 30, 2021. (3) Includes one-time costs associated with the sale of the data center portfolio, inclusive of defeasance and other loan costs in the amount of $26.1 million.


 
Cash Net Operating Income Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Rental revenue $ 49,318 $ 70,667 $ 194,210 $ 208,727 Rental expenses (5,528) (12,068) (25,250) (34,478) Net operating income 43,790 58,599 168,960 174,249 Adjustments: Straight-line rent (3,414) (5,235) (12,492) (16,146) Amortization of above- and below-market leases, net 13 (2,810) (1,239) (4,067) Reduction in the carrying amount of right-of-use assets - operating ground leases 124 235 540 702 Cash NOI $ 40,513 $ 50,789 $ 155,769 $ 154,738 Cash NOI margin 82.1 % 71.9 % 80.2 % 74.1 % Cash NOI yield1 6.6 % 6.4 % 7.1 % 6.5 % Healthcare Cash Net Operating Income Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Rental revenue $ 43,063 $ 40,722 $ 129,232 $ 123,879 Rental expenses (3,024) (4,405) (9,513) (12,639) Healthcare NOI 40,039 36,317 119,719 111,240 Adjustments: Straight-line rent (3,202) (3,888) (9,983) (11,870) Amortization of above- and below-market leases, net 145 183 471 915 Reduction in the carrying amount of right-of-use assets - operating ground leases 124 126 372 374 Healthcare cash NOI $ 37,106 $ 32,738 $ 110,579 $ 100,659 Healthcare cash NOI margin 86.2 % 80.4 % 85.6 % 81.3 % Healthcare cash NOI yield1 6.6 % 5.9 % 6.6 % 6.0 % Data Center Cash Net Operating Income2 Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Rental revenue $ 6,255 $ 29,945 $ 64,978 $ 84,848 Rental expenses (2,504) (7,663) (15,737) (21,839) Data Center NOI 3,751 22,282 49,241 63,009 Adjustments: Straight-line rent (212) (1,347) (2,509) (4,276) Amortization of above- and below-market leases, net (132) (2,993) (1,710) (4,982) Reduction in the carrying amount of right-of-use assets - operating ground leases — 109 168 328 Data Center cash NOI $ 3,407 $ 18,051 $ 45,190 $ 54,079 Data Center cash NOI margin 54.5 % 60.3 % 69.5 % 63.7 % Data Center cash NOI yield1 6.2 % 7.6 % 8.5 % 7.6 % Net Operating Income (NOI) (dollars in thousands) See the glossary for a description of the company's non-GAAP financial and operating metrics. 9 Page (1) Calculated using annualized NOI for the three and nine months ended September 30, 2021 and 2020, respectively, to weighted average real estate investment since inception. (2) The data center sale was completed on July 22, 2021 and presented as a part of discontinued operations on the condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2021 and 2020. Q3 2021


 
118 Properties1 Same Store NOI and Occupancy Trends See the glossary for a description of the company's non-GAAP financial and operating metrics. 10 Page (1) Each quarter's results are based on properties owned and operated as of July 1, 2020, and excludes the 29 data center properties that were sold on July 22, 2021 and two healthcare properties held for sale as of September 30, 2021. Q3 2021 N et O pe ra ti ng In co m e End of Period O ccupancy $36.7 $38.8 $38.7 $38.8 $38.8 98.0% 98.0% 98.3% 98.3% 98.3% 3Q20 4Q20 1Q21 2Q21 3Q21 $0M $9M $18M $27M $36M $45M 40% 50% 60% 70% 80% 90% 100%


 
$0.0 $0.0 $0.0 $520.0 $0.0 $0.0 2021 2022 2023 2024 2025 2026+ $0M $100M $200M $300M $400M $500M $600M 3 Unsecured Credit Facility Key Covenants Required Actual Ratio of total indebtedness to total gross asset value ≤ 60.0% 24.8 % Ratio of secured indebtedness to total gross asset value ≤ 40.0% — % Ratio of adjusted EBITDA to fixed charges ≥ 1.75x 4.72x Ratio of unencumbered adjusted NOI to unsecured interest expense ≥ 2.00x 4.78x The table above includes a summary of key financial covenants for the company's credit facility, as defined and calculated per the terms of the facility's credit agreement. These calculations, which are not based on GAAP measurements, are presented to investors to show that the company is in compliance with the covenants and are not measures of the company's liquidity or performance. Debt Summary Fixed rate debt Amount Rate1 % of Total Credit facility term loans, fixed through interest rate swaps 400.0 3.3 % 76.9 % Total fixed rate debt 400.0 3.3 % 76.9 % Variable rate debt2 Credit facility term loans 120.0 1.8 % 23.1 % Total variable rate debt 120.0 1.8 % 23.1 % Total principal debt $ 520.0 2.9 % 100.0 % Debt (dollars in millions) Debt Maturities See the glossary for a description of the company's non-GAAP financial and operating metrics. 11 Page (1) Weighted average interest rate as of September 30, 2021. (2) LIBOR plus an applicable margin based on the company's debt agreements. On September 29, 2021, the company received consent for the acceleration of the applicable margin adjustment date on the credit facility, reducing the applicable margin from 2.25% to 1.75%, effective September 29, 2021. Per the current language in the credit agreement, the applicable margin adjustment would not have otherwise taken place until December 1, 2021. (3) The revolving line of credit, which has $0 outstanding as of September 30, 2021, has a maturity date of April 27, 2022, subject to the company's right for one 12-month extension period. (4) Of this amount, two interest rate swaps with an aggregate notional amount of $150.0 million mature on April 27, 2023, prior to the term loan maturity of December 31, 2024. Credit Facility Revolver - Variable Credit Facility Term Loan - Fixed Through Swaps Credit Facility Term Loan - Variable Q3 2021 4


 
Acquisitions and Dispositions See the glossary for a description of the company's non-GAAP financial and operating metrics. 12 Page Q3 2021 2021 Acquisition Date Acquired Property Rentable Square Feet Market State Acquisition Price (in thousands) 04/19/2021 Greenwood Healthcare Facility 53,560 Indianapolis IN $ 25,048 On July 22, 2021, the company completed the sale of its data center portfolio, consisting of 29 data center properties composing 3.3 million rentable square feet, for an aggregate sale price of $1.32 billion, and generated net proceeds of approximately $1.30 billion. 2021 Dispositions Date Disposed Property Rentable Square Feet Market State 07/22/2021 Alpharetta Data Center 77,322 Atlanta GA 07/22/2021 Atlanta Data Center 997,248 Atlanta GA 07/22/2021 Andover Data Center 153,000 Boston MA 07/22/2021 Norwalk Data Center 167,691 Bridgeport CT 07/22/2021 Canton Data Center 29,960 Canton OH 07/22/2021 Charlotte Data Center 52,924 Charlotte NC 07/22/2021 Chicago Data Center 115,352 Chicago IL 07/22/2021 Elgin Data Center 65,745 Chicago IL 07/22/2021 Cincinnati Data Center 69,826 Cincinnati OH 07/22/2021 Blythewood Data Center 64,637 Columbia SC 07/22/2021 Flint Data Center 32,500 Flint MI 07/22/2021 Houston Data Center 103,200 Houston TX 07/22/2021 Indianapolis Data Center 43,724 Indianapolis IN 07/22/2021 Hawthorne Data Center 288,000 Los Angeles CA 07/22/2021 Eagan Data Center 87,402 Minneapolis MN 07/22/2021 Minnetonka Data Center 135,240 Minneapolis MN 07/22/2021 Franklin Data Center 71,726 Nashville TN 07/22/2021 Somerset Data Center 36,118 New York City NJ 07/22/2021 Oklahoma City Data Center 92,456 Oklahoma City OK 07/22/2021 King of Prussia Data Center 50,000 Philadelphia PA 07/22/2021 Tempe Data Center 44,244 Phoenix AZ 07/22/2021 Tempe Data Center II 58,560 Phoenix AZ 07/22/2021 Rancho Cordova Data Center 69,048 Sacramento CA 07/22/2021 Rancho Cordova Data Center II 63,791 Sacramento CA 07/22/2021 San Jose Data Center 76,410 San Jose CA 07/22/2021 Sunnyvale Data Center 76,573 San Jose CA 07/22/2021 Waco Data Center 43,596 Waco TX 07/22/2021 McLean Data Center 69,329 Washington, D.C. VA 07/22/2021 McLean Data Center II 62,002 Washington, D.C. VA Total Year-to-Date Dispositions 3,297,624 On October 21, 2021, the company sold the St. Louis Healthcare Facility, consisting of 21,823 rentable square feet, for $6.1 million, and generated net proceeds of approximately $5.9 million, after transaction costs and other pro-rations, subject to additional transaction costs paid subsequent to the closing date.


 
Property Map (as of September 30, 2021) See the glossary for a description of the company's non-GAAP financial and operating metrics. 13 Page Q3 2021


 
10.4% 8.1% 7.0% 5.7% 4.8% 4.3% 3.4% 2.9% 2.7% 2.5% Houston Dallas Oklahoma City San Antonio Philadelphia Akron Riverside Austin Cincinnati Lubbock Total Statistics As of September 30, 2021 2020 Rentable square feet 5,297,637 5,361,372 Number of properties4 125 124 Weighted average annualized base rent per leased square foot $29.62 $28.85 Weighted average remaining lease term 9.8 years 10.6 years Weighted average occupancy 96.0 % 92.7 % Top 10 Markets1 As of September 30, 2021 As of September 30, 2020 Rentable Square Feet % Leased3 Rentable Square Feet % Leased3 Houston 593,111 82.7 % 593,111 84.1 % Dallas 373,990 83.6 % 573,172 54.4 % Oklahoma City 433,513 100.0 % 433,513 100.0 % San Antonio 293,782 100.0 % 293,782 96.3 % Philadelphia 122,356 100.0 % 122,356 100.0 % Akron 191,269 100.0 % 191,269 100.0 % Riverside 73,643 100.0 % 73,643 100.0 % Austin 125,271 100.0 % 125,271 100.0 % Cincinnati 237,496 100.0 % 237,496 100.0 % Lubbock 102,143 100.0 % 102,143 100.0 % Total 2,546,574 93.6 % 2,745,756 86.6 % Top 10 Markets1,2 Real Estate Diversification: Healthcare See the glossary for a description of the company's non-GAAP financial and operating metrics. 14 Page (1) Based on annualized September 2021 base rent. (2) Represents each market's annualized September 2021 base rent as a percentage of total market annualized September 2021 base rent. (3) Weighted average occupancy based on rentable square feet. (4) Includes development property. Q3 2021


 
14.9% 6.3% 55.6% 23.2% 35.5% 24.2% 26.8% 12.0% 1.5% 90.2% 91.3% 9.8% 8.7% Number of Properties Annualized Base Rent (September 2021) A nn ua liz ed B as e Re nt Square Feet 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Thereafter $0M $19M $38M $57M $76M $95M 0.0M 0.5M 1.0M 1.5M 2.0M 2.5M 3.0M 16.0% 8.2% 7.4% 6.6% 6.5% 6.1% 5.7% 4.7% 3.4% 2.9% Post Acute Medical, LLC and affiliates Baylor Scott and White Health Board of Regents of the Univ. of Texas System Select Medical Holdings Corporation Confidential Healthcare Tenant #11 Confidential Healthcare Tenant #10 Genesis Care Pty Ltd Surgery Partners, Inc. Confidential Healthcare Tenant #4 Confidential Healthcare Tenant #3 Property Diversification1Tenant Diversification1,2 Real Estate Diversification: Healthcare Lease Expirations Single/Multi-Tenant Breakdown3 See the glossary for a description of the company's non-GAAP financial and operating metrics. 15 Page (1) Based on annualized September 2021 base rent. (2) Includes tenants under common control. (3) Excludes vacant properties. (4) Includes development property. (5) Based on rental revenue for the nine months ended September 30, 2021. (6) All credit ratings are from major credit rating agencies. Parent credit rating is used where tenant is not rated. Annualized Base Rent (September 2021) Expiring Leased Square Feet Medical Office Building Inpatient Rehabilitation Facility Acute Care Hospital Long-Term Acute Care Hospital Other Single Tenant Multi-Tenant Q3 2021 4 Tenant Credit Concentrations5,6 Investment Grade Rated Tenant/ Guarantor Non-Investment Grade Rated Tenant/Guarantor Non-Rated Tenant/Guarantor Non-Rated Tenant/Guarantor affiliated with Investment Grade Rated Partner


 
Market Property Name State Rentable Square Feet Date Acquired Occupancy Property Subtype Akron Akron Healthcare Facility OH 98,705 10/4/2019 100.0 % Medical Office Building Akron Akron Healthcare Facility II OH 38,564 10/4/2019 100.0 % Medical Office Building Akron Akron Healthcare Facility III OH 54,000 10/4/2019 100.0 % Long-Term Acute Care Hospital Alexandria Alexandria Healthcare Facility LA 15,600 10/4/2019 100.0 % Medical Office Building Appleton Appleton Healthcare Facility WI 7,552 10/4/2019 100.0 % Medical Office Building Augusta Augusta Healthcare Facility ME 51,000 7/22/2015 100.0 % Medical Office Building Augusta Oakland Healthcare Facility ME 20,000 7/22/2015 100.0 % Medical Office Building Austin Austin Healthcare Facility TX 66,095 3/31/2017 100.0 % Inpatient Rehabilitation Facility Austin Austin Healthcare Facility II TX 18,275 10/4/2019 100.0 % Medical Office Building Austin Luling Healthcare Facility TX 40,901 7/30/2015 100.0 % Long-Term Acute Care Hospital Beaumont Beaumont Healthcare Facility TX 61,000 3/31/2017 100.0 % Inpatient Rehabilitation Facility Boston Stoughton Healthcare Facility MA 180,744 12/23/2014 100.0 % Long-Term Acute Care Hospital Bremerton Silverdale Healthcare Facility WA 25,892 8/25/2017 100.0 % Medical Office Building Bremerton Silverdale Healthcare Facility II WA 19,184 9/20/2017 100.0 % Medical Office Building Brownsville Harlingen Healthcare Facility TX 38,111 10/4/2019 100.0 % Medical Office Building Chicago Aurora Healthcare Facility IL 24,722 3/30/2017 100.0 % Medical Office Building Cincinnati Cincinnati Healthcare Facility OH 14,868 10/29/2014 100.0 % Medical Office Building Cincinnati Cincinnati Healthcare Facility II OH 139,428 7/22/2015 100.0 % Medical Office Building Cincinnati Cincinnati Healthcare Facility III OH 41,600 7/22/2015 100.0 % Medical Office Building Cincinnati Florence Healthcare Facility KY 41,600 7/22/2015 100.0 % Medical Office Building Corpus Christi Corpus Christi Healthcare Facility TX 25,102 12/22/2016 100.0 % Medical Office Building Dallas Allen Healthcare Facility TX 42,627 3/31/2017 100.0 % Inpatient Rehabilitation Facility Dallas Carrollton Healthcare Facility TX 21,990 4/27/2018 100.0 % Medical Office Building Dallas Dallas Healthcare Facility TX 62,390 10/4/2019 100.0 % Acute Care Hospital Dallas Fort Worth Healthcare Facility TX 83,464 12/31/2014 100.0 % Acute Care Hospital Dallas Fort Worth Healthcare Facility II TX 8,268 12/31/2014 100.0 % Medical Office Building Dallas Fort Worth Healthcare Facility III TX 36,800 12/23/2015 100.0 % Medical Office Building Dallas Frisco Healthcare Facility TX 57,051 10/4/2019 100.0 % Inpatient Rehabilitation Facility Dallas Grapevine Healthcare Facility TX 61,400 10/4/2019 — % Long-Term Acute Care Hospital Denver Denver Healthcare Facility CO 131,210 10/4/2019 100.0 % Long-Term Acute Care Hospital Des Moines Clive Healthcare Facility IA 58,156 11/26/2018 100.0 % Medical Office Building Des Moines Grimes Healthcare Facility IA 14,669 2/19/2020 100.0 % Medical Office Building Des Moines Indianola Healthcare Facility IA 18,116 9/26/2018 100.0 % Medical Office Building Des Moines Indianola Healthcare Facility II IA 20,990 9/26/2018 100.0 % Medical Office Building Destin Crestview Healthcare Facility FL 5,685 10/4/2019 100.0 % Medical Office Building Destin Fort Walton Beach Healthcare Facility FL 9,017 10/4/2019 100.0 % Medical Office Building Portfolio See the glossary for a description of the company's non-GAAP financial and operating metrics. 16 Page Q3 2021


 
Portfolio (Continued) Market Property Name State Rentable Square Feet Date Acquired Occupancy Property Subtype Destin Santa Rosa Beach Healthcare Facility FL 5,000 10/4/2019 100.0 % Medical Office Building Elkhart Goshen Healthcare Facility IN 15,462 10/4/2019 100.0 % Medical Office Building Fayetteville Fayetteville Healthcare Facility AR 55,740 10/4/2019 100.0 % Acute Care Hospital Fort Myers Bonita Springs Healthcare Facility FL 9,800 10/4/2019 100.0 % Medical Office Building Fort Myers Fort Myers Healthcare Facility FL 32,148 10/4/2019 100.0 % Medical Office Building Fort Myers Fort Myers Healthcare Facility II FL 47,089 10/4/2019 100.0 % Medical Office Building Fort Myers Lehigh Acres Healthcare Facility FL 5,746 10/4/2019 100.0 % Medical Office Building Grand Rapids Grand Rapids Healthcare Facility MI 107,781 12/7/2016 76.1 % Medical Office Building Green Bay Bellevue Healthcare Facility WI 5,838 10/4/2019 100.0 % Medical Office Building Green Bay De Pere Healthcare Facility WI 7,100 10/4/2019 100.0 % Medical Office Building Green Bay Howard Healthcare Facility WI 7,552 10/4/2019 100.0 % Medical Office Building Green Bay Manitowoc Healthcare Facility WI 7,987 10/4/2019 100.0 % Medical Office Building Green Bay Manitowoc Healthcare Facility II WI 36,090 10/4/2019 100.0 % Medical Office Building Green Bay Marinette Healthcare Facility WI 4,178 10/4/2019 100.0 % Medical Office Building Green Bay Sturgeon Bay Healthcare Facility WI 3,100 10/4/2019 100.0 % Medical Office Building Hammond Hammond Healthcare Facility LA 63,000 10/4/2019 100.0 % Acute Care Hospital Hammond Hammond Healthcare Facility II LA 23,835 10/4/2019 100.0 % Long-Term Acute Care Hospital Houston Houston Healthcare Facility TX 13,645 7/31/2014 100.0 % Medical Office Building Houston Houston Healthcare Facility II TX 102,369 6/30/2015 — % Long-Term Acute Care Hospital Houston Houston Healthcare Facility III TX 16,217 10/4/2019 100.0 % Medical Office Building Houston Katy Healthcare Facility TX 34,296 6/8/2018 100.0 % Other Houston Webster Healthcare Facility TX 53,514 6/5/2015 100.0 % Inpatient Rehabilitation Facility Houston Webster Healthcare Facility II TX 373,070 10/4/2019 100.0 % Acute Care Hospital Indianapolis Greenwood Healthcare Facility IN 53,560 4/19/2021 100.0 % Inpatient Rehabilitation Facility Jacksonville Jacksonville Healthcare Facility FL 13,082 10/4/2019 100.0 % Medical Office Building Kansas City Overland Park Healthcare Facility KS 54,568 2/17/2015 100.0 % Inpatient Rehabilitation Facility Lafayette Lafayette Healthcare Facility LA 73,824 10/4/2019 100.0 % Acute Care Hospital Lakeland Winter Haven Healthcare Facility FL 7,560 1/27/2015 100.0 % Medical Office Building Laredo Laredo Healthcare Facility TX 61,677 9/19/2019 100.0 % Medical Office Building Laredo Laredo Healthcare Facility II TX 118,132 9/19/2019 100.0 % Medical Office Building Las Vegas Henderson Healthcare Facility NV 6,685 10/4/2019 100.0 % Medical Office Building Las Vegas Las Vegas Healthcare Facility NV 56,220 6/24/2016 100.0 % Inpatient Rehabilitation Facility Las Vegas Las Vegas Healthcare Facility II NV 6,963 10/4/2019 100.0 % Medical Office Building Lexington Frankfort Healthcare Facility KY 4,000 10/4/2019 100.0 % Medical Office Building Little Rock Benton Healthcare Facility AR 104,419 10/17/2018 100.0 % Medical Office Building Little Rock Benton Healthcare Facility II AR 11,350 10/17/2018 100.0 % Medical Office Building Little Rock Bryant Healthcare Facility AR 23,450 10/17/2018 100.0 % Medical Office Building See the glossary for a description of the company's non-GAAP financial and operating metrics. 17 Page Q3 2021


 
Portfolio (Continued) Market Property Name State Rentable Square Feet Date Acquired Occupancy Property Subtype Little Rock Bryant Healthcare Facility II AR 16,154 8/16/2019 100.0 % Medical Office Building Little Rock Hot Springs Healthcare Facility AR 8,573 10/17/2018 100.0 % Medical Office Building Los Angeles El Segundo Healthcare Facility CA 12,163 10/4/2019 100.0 % Medical Office Building Lubbock Lubbock Healthcare Facility TX 102,143 10/4/2019 100.0 % Acute Care Hospital Martinsburg Fairlea Healthcare Facility WV 5,200 10/4/2019 100.0 % Medical Office Building New Orleans Covington Healthcare Facility LA 43,250 10/4/2019 100.0 % Long-Term Acute Care Hospital Oklahoma City Edmond Healthcare Facility OK 17,700 1/20/2016 100.0 % Medical Office Building Oklahoma City Newcastle Healthcare Facility OK 7,424 2/3/2016 100.0 % Medical Office Building Oklahoma City Oklahoma City Healthcare Facility OK 94,076 12/29/2015 100.0 % Acute Care Hospital Oklahoma City Oklahoma City Healthcare Facility II OK 41,394 12/29/2015 100.0 % Medical Office Building Oklahoma City Oklahoma City Healthcare Facility III OK 5,000 1/27/2016 100.0 % Medical Office Building Oklahoma City Oklahoma City Healthcare Facility IV OK 8,762 1/27/2016 100.0 % Medical Office Building Oklahoma City Oklahoma City Healthcare Facility V OK 43,676 2/11/2016 100.0 % Medical Office Building Oklahoma City Oklahoma City Healthcare Facility VI OK 14,676 3/7/2016 100.0 % Medical Office Building Oklahoma City Oklahoma City Healthcare Facility VII OK 102,978 6/22/2016 100.0 % Acute Care Hospital Oklahoma City Oklahoma City Healthcare Facility VIII OK 62,857 6/30/2016 100.0 % Acute Care Hospital Oklahoma City Oklahoma City Healthcare Facility IX OK 34,970 10/4/2019 100.0 % Medical Office Building Omaha Omaha Healthcare Facility NE 40,402 10/14/2015 100.0 % Other Oshkosh Oshkosh Healthcare Facility WI 8,717 10/4/2019 100.0 % Medical Office Building Philadelphia Marlton Healthcare Facility NJ 89,139 11/1/2016 100.0 % Inpatient Rehabilitation Facility Philadelphia Wyomissing Healthcare Facility PA 33,217 7/24/2015 100.0 % Acute Care Hospital Pittsburgh Clarion Healthcare Facility PA 33,000 6/1/2015 100.0 % Medical Office Building Poplar Bluff Poplar Bluff Healthcare Facility MO 71,519 9/19/2019 100.0 % Medical Office Building Providence New Bedford Healthcare Facility MA 70,657 10/4/2019 100.0 % Long-Term Acute Care Hospital Providence North Smithfield Healthcare Facility RI 92,944 10/4/2019 100.0 % Inpatient Rehabilitation Facility Riverside Palm Desert Healthcare Facility CA 6,963 10/4/2019 100.0 % Medical Office Building Riverside Rancho Mirage Healthcare Facility CA 47,008 3/1/2016 100.0 % Inpatient Rehabilitation Facility Riverside Rancho Mirage Healthcare Facility II CA 7,432 10/4/2019 100.0 % Medical Office Building Riverside Yucca Valley Healthcare Facility CA 12,240 10/4/2019 100.0 % Medical Office Building Saginaw Saginaw Healthcare Facility MI 87,843 12/21/2017 100.0 % Medical Office Building San Antonio New Braunfels Healthcare Facility TX 27,971 10/4/2019 100.0 % Long-Term Acute Care Hospital San Antonio San Antonio Healthcare Facility TX 44,746 6/29/2017 100.0 % Inpatient Rehabilitation Facility San Antonio San Antonio Healthcare Facility III TX 50,000 10/4/2019 100.0 % Inpatient Rehabilitation Facility San Antonio San Antonio Healthcare Facility IV TX 113,136 10/4/2019 100.0 % Inpatient Rehabilitation Facility San Antonio San Antonio Healthcare Facility V TX 57,929 10/4/2019 100.0 % Medical Office Building Sarasota Lakewood Ranch Healthcare Facility FL 10,919 10/4/2019 100.0 % Medical Office Building See the glossary for a description of the company's non-GAAP financial and operating metrics. 18 Page Q3 2021


 
Portfolio (Continued) Market Property Name State Rentable Square Feet Date Acquired Occupancy Property Subtype Savannah Savannah Healthcare Facility GA 48,184 10/4/2019 100.0 % Long-Term Acute Care Hospital Scranton Wilkes-Barre Healthcare Facility PA 15,996 10/4/2019 100.0 % Medical Office Building Sherman Sherman Healthcare Facility TX 57,576 11/20/2015 100.0 % Acute Care Hospital Sherman Sherman Healthcare Facility II TX 8,055 11/20/2015 100.0 % Medical Office Building St. Louis Bridgeton Healthcare Facility MO 66,914 10/4/2019 100.0 % Inpatient Rehabilitation Facility St. Louis St. Louis Healthcare Facility1 MO 21,823 10/4/2019 — % Medical Office Building Tampa Tampa Healthcare Facility FL 33,822 9/8/2020 100.0 % Medical Office Building Tucson Tucson Healthcare Facility AZ 34,009 9/19/2019 100.0 % Medical Office Building Tucson Tucson Healthcare Facility II AZ 60,913 12/26/2019 100.0 % Inpatient Rehabilitation Facility Tucson Tucson Healthcare Facility III AZ 20,000 12/27/2019 100.0 % Medical Office Building Tucson Tucson Healthcare Facility IV2 AZ — 12/22/2020 — % Medical Office Building Valdosta Valdosta Healthcare Facility GA 24,750 11/28/2018 100.0 % Medical Office Building Valdosta Valdosta Healthcare Facility II GA 12,745 11/28/2018 100.0 % Medical Office Building Victoria Victoria Healthcare Facility TX 34,297 10/4/2019 100.0 % Inpatient Rehabilitation Facility Victoria Victoria Healthcare Facility II TX 28,752 10/4/2019 100.0 % Long-Term Acute Care Hospital Winston Winston-Salem Healthcare Facility NC 22,200 12/17/2014 100.0 % Medical Office Building . See the glossary for a description of the company's non-GAAP financial and operating metrics. 19 Page (1) On October 21, 2021, the company sold the St. Louis Healthcare Facility for $6.1 million and generated net proceeds of approximately $5.9 million, after transaction costs and other pro-rations, subject to additional transaction costs paid subsequent to the closing date. (2) Tucson Healthcare Facility IV is a development property that the company expects will be approximately 44,692 rentable square feet, with 89% occupancy at anticipated lease commencement in 2022. Q3 2021


 
Annualized Base Rent is the sum of each tenant’s base rent in the last month of the period multiplied by twelve, unless otherwise specified. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre) are non-GAAP, supplemental performance measures defined as net income or loss, computed in accordance with GAAP, adjusted for interest expense, income tax expense (benefit), depreciation and amortization. EBITDAre also includes adjustments for impairment write-downs on real estate and gains or losses from the disposition of property. EBITDA and EBITDAre are definitions promulgated by the National Association of Real Estate Investment Trusts (NAREIT). Each of these metrics are important indicators of the company’s operating performance. The following is a reconciliation of net income attributable to common stockholders, which is the most directly comparable GAAP financial measure, to EBITDA and EBITDAre for the following quarterly periods (amounts in thousands): Fair Market Value of Real Estate Investments is determined as fair market value of real estate-related investments based on the NAV (as defined below) calculated as of May 31, 2021, plus total aggregate cost of real estate investments acquired after that date and capital expenditures incurred on development properties not included in the then current NAV. Three Months Ended September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 Net income attributable to common stockholders $ 371,645 $ 16,056 $ 2,882 $ 14,748 $ 5,264 Adjustments: Interest and other expense, net 36,822 12,922 12,130 12,849 13,284 Depreciation and amortization 17,294 21,596 25,967 24,875 28,249 EBITDA1 $ 425,761 $ 50,574 $ 40,979 $ 52,472 $ 46,797 Gain on real estate disposition from continuing operations — — — (439) — Gain on real estate dispositions from discontinued operations (398,560) — — — — Impairment loss on real estate 10,241 6,502 10,423 — — Cash deposits interest 2 6 4 9 18 EBITDAre1 $ 37,444 $ 57,082 $ 51,406 $ 52,042 $ 46,815 Glossary 20 Page Q3 2021 (1) Includes the 29 data center properties sold on July 22, 2021.


 
Three Months Ended September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 Net income attributable to common stockholders $ 371,645 $ 16,056 $ 2,882 $ 14,748 $ 5,264 Adjustments: Depreciation and amortization1 17,289 21,592 25,962 24,869 28,248 Gain on real estate disposition from continuing operations — — — (439) — Gain on real estate dispositions from discontinued operations (398,560) — — — — Impairment loss on real estate 10,241 6,502 10,423 — — FFO attributable to common stockholders $ 615 $ 44,150 $ 39,267 $ 39,178 $ 33,512 Adjustments: Amortization of intangible assets and liabilities2 13 (639) (613) (613) (2,810) Reduction in the carrying amount of right-of-use assets - operating leases and finance lease, net 189 216 269 268 235 Straight-line rent3 (3,414) (4,452) (4,626) (5,015) (5,235) Internalization transaction expenses4 — — — — 2,235 Amortization of discount of deferred liability 163 55 54 54 — Impairment loss on goodwill5 — 431 240 — — Loss on extinguishment of debt 28,751 — — — — Amortization of deferred financing costs 754 1,011 996 1,001 990 Stock-based compensation 637 563 556 335 45 AFFO attributable to common stockholders $ 27,708 $ 41,335 $ 36,143 $ 35,208 $ 28,972 The following is a reconciliation of net income attributable to common stockholders, which is the most directly comparable GAAP financial measure, to FFO and AFFO for the following quarterly periods (amounts in thousands): Glossary 21 Page (1) During the three months ended September 30, 2020, the company wrote off in-place intangible assets in the amounts of approximately $3.2 million, by accelerating the amortization of the acquired intangible assets. During the nine months ended September 30, 2021 and 2020, the company wrote off in-place lease intangible assets in the amounts of approximately $1.1 million and $4.7 million, respectively, by accelerating the amortization of the acquired intangible assets. (2) Under GAAP, certain intangibles are accounted for at cost and reviewed for impairment. However, because real estate values and market lease rates historically rise or fall with market conditions, management believes that by excluding charges related to amortization of these intangibles, AFFO provides useful supplemental information on the performance of the real estate. During the nine months ended September 30, 2020, the company wrote off an above-market lease intangible asset in the amount of approximately $0.3 million, by accelerating the amortization of the acquired intangible asset. During the three and nine months ended September 30, 2020, the company wrote off one below-market lease intangible liability in the amount of approximately $2.0 million by accelerating the amortization of the acquired intangible liability. (3) Under GAAP, rental revenue is recognized on a straight-line basis over the terms of the related lease (including rent holidays if applicable). This may result in income recognition that is significantly different than the underlying contract terms. During the nine months ended September 30, 2021, the company wrote off approximately $0.1 million of straight-line rent. During the three and nine months ended September 30, 2020, the company wrote off approximately $0.1 million of straight-line rent. By adjusting for the change in straight-line rent receivable, AFFO may provide useful supplemental information on the realized economic impact of lease terms, providing insight on the expected contractual cash flows of such lease terms, and aligns with its analysis of operating performance. (4) Under GAAP, acquisition fees and expenses related to transactions determined to be business combinations are expensed as incurred. Internalization transaction expenses consisted primarily of legal fees, as well as fees for other professional and financial advisors incurred in connection with the internalization transaction. The company believes that adjusting for such non-recurring items provides useful supplemental information because such expenses may not be reflective of ongoing operations and aligns with its analysis of operating performance. (5) During the nine months ended September 30, 2021, the company wrote off goodwill related to three reporting units in the amount of approximately $0.7 million, which was originally recognized as a part of the internalization transaction on September 30, 2020, as a result of a business combination. The company believes that adjusting for such non-recurring items provides useful supplemental information because such adjustments may not be reflective of ongoing operations and aligns with its analysis of operating performance. Q3 2021 Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO) are non-GAAP financial measures. FFO is calculated using the NAREIT definition: net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and asset impairment write-downs, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. It should be noted, however, that other REITs may not define FFO in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently than the company does, making comparisons less meaningful. In addition to FFO, the company uses AFFO as a supplemental financial performance measure because the company believes it provides to stakeholders a more complete understanding of the company’s sustainable performance. AFFO is a metric used by management to evaluate the company's dividend policy. The company calculates AFFO, a non-GAAP measure, by further adjusting FFO for the following items included in the determination of GAAP net income: amortization of above- and below-market leases, along with the net of right-of-use assets- operating leases and right-of-use assets- finance lease, resulting from above-and below-market leases, straight-line rent, acquisition expenses in connection with business combination transactions, discount amortization related to the deferred liability in connection with the internalization transaction, impairment loss on goodwill, (gain) loss on extinguishment of debt, amortization of deferred financing costs and stock-based compensation. Other REITs may use different methodologies for calculating AFFO and, accordingly, the company’s AFFO may not be comparable to other REITs. FFO and AFFO should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating our operational performance. The method used to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operating performance and considered more prominent than the non-GAAP FFO and AFFO measures and the adjustments to GAAP in calculating FFO and AFFO.


 
Net Debt is defined as principal debt outstanding less cash and cash equivalents. Net Debt provides useful information to investors and management by calculating and monitoring the company’s leverage ratio. The following is a reconciliation of total debt, net, which is the most directly comparable GAAP financial measure to net debt, for the following quarterly periods (amounts in thousands): As of September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 Notes payable, net $ — $ 449,780 $ 450,719 $ 451,617 $ 452,496 Credit facility, net 516,506 947,979 932,546 932,100 976,657 Total debt, net 516,506 1,397,759 1,383,265 1,383,717 1,429,153 Deferred financing costs, net 3,494 6,425 7,033 7,705 8,370 Principal debt outstanding 520,000 1,404,184 1,390,298 1,391,422 1,437,523 Less: cash and cash equivalents 75,363 47,921 51,039 53,174 75,505 Net debt1 $ 444,637 $ 1,356,263 $ 1,339,259 $ 1,338,248 $ 1,362,018 Net Asset Value (NAV) is determined by the board of directors, at the recommendation of the company's audit committee, and based on the estimated value of the company’s assets, less the estimated value of the company’s liabilities, divided by the approximate number of shares outstanding on a fully diluted basis. This valuation is performed in accordance with the provisions of Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the IPA in April 2013, in addition to guidance from the SEC. Liquidity is a non-GAAP financial metric that represents the outstanding cash and cash equivalents combined with the remaining borrowing base availability on the company’s credit facility at the end of the period. This metric provides useful information to investors and management when examining the company’s financing and investing decisions. Glossary 22 Page Q3 2021 (1) Includes the 29 data center properties sold on July 22, 2021. Interest Expense, Adjusted is a non-GAAP measure that represents interest and other expense, net, adjusted for cash deposits interest, other income, notes receivable interest income and amortization of origination fee. This metric provides useful information to investors because it is used for the calculation of adjusted interest coverage ratio. The following is a reconciliation of interest and other expense, net, which is the most directly comparable GAAP financial measure, to interest expense, adjusted for the following quarterly periods (amounts in thousands): Three Months Ended September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 Interest and other expense, net $ 36,822 $ 12,922 $ 12,130 $ 12,849 $ 13,284 Cash deposits interest 2 6 4 9 18 Other income 731 — 652 597 35 Notes receivable interest income 87 519 490 501 501 Amortization of origination fee (256) (70) (68) (70) (70) Interest expense, adjusted1 $ 37,386 $ 13,377 $ 13,208 $ 13,886 $ 13,768 (1) Includes the 29 data center properties sold on July 22, 2021.


 
Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Healthcare: Healthcare rental revenue $ 43,063 $ 40,722 $ 129,232 $ 123,879 Healthcare rental expense (3,024) (4,405) (9,513) (12,639) Healthcare NOI 40,039 36,317 119,719 111,240 Data Centers: Data Center rental revenue 6,255 29,945 64,978 84,848 Data Center rental expense (2,504) (7,663) (15,737) (21,839) Data Center NOI 3,751 22,282 49,241 63,009 Total NOI 43,790 58,599 168,960 174,249 Straight-line rent1 (3,414) (5,235) (12,492) (16,146) Amortization of above- and below-market leases, net1 13 (2,810) (1,239) (4,067) Reduction in the carrying amount of right-of-use assets - operating ground leases1 124 235 540 702 Cash NOI 40,513 50,789 155,769 154,738 General and administrative expenses (6,348) (3,578) (19,610) (9,960) Internalization transaction expenses — (2,235) — (3,640) Asset management fees1 — (5,989) — (17,914) Depreciation and amortization1 (17,294) (28,249) (64,857) (80,608) Impairment loss on real estate (10,241) — (27,166) — Impairment loss on goodwill — — (671) — Gain on real estate disposition from continuing operations — — — 2,703 Gain on real estate dispositions from discontinued operations2 398,560 — 395,801 — Interest and other expense, net1 (36,822) (13,284) (61,874) (42,802) Straight-line rent1 3,414 5,235 12,492 16,146 Amortization of above- and below-market leases, net1 (13) 2,810 1,239 4,067 Reduction in the carrying amount of right-of-use assets - operating ground leases1 (124) (235) (540) (702) Net income attributable to common stockholders $ 371,645 $ 5,264 $ 390,583 $ 22,028 The following is a reconciliation of net income attributable to common stockholders, which is the most directly comparable GAAP financial measure, to Healthcare NOI, Data Center NOI, Total NOI and Cash NOI, for the following periods (amounts in thousands): Glossary 23 Page Q3 2021 (1) Includes the 29 data center properties sold on July 22, 2021. (2) Includes $2,759,000 in transaction costs related to the data center sale that were reclassified as a part of gain on real estate dispositions during the three months ended September 30, 2021. Net Operating Income (NOI) and Cash NOI are non-GAAP financial measures. NOI is defined as rental revenue, less rental expenses on an accrual basis, excluding general and administrative expenses, internalization transaction expenses, asset management fees, depreciation and amortization, impairment loss on real estate, impairment loss on goodwill, gain on real estate dispositions from continuing and discontinued operations and interest and other expense, net. Cash NOI is calculated to exclude the impact of certain GAAP adjustments to rental revenue, such as straight-line rent, amortization of above-market intangible lease assets and below-market lease intangible liabilities and the reduction in the carrying amount of right-of-use assets - operating ground leases, and is used to evaluate the cash-based performance of the company’s real estate portfolio. The company believes that NOI and Cash NOI both serve as useful supplements to net income because they allow investors and management to measure unlevered property-level operating results and to compare these results to the comparable results of other real estate companies on a consistent basis. The company uses both NOI and Cash NOI to make decisions about resource allocations and to assess the property-level performance of the real estate portfolio. As an indicator of financial performance, neither metric should be considered as an alternative to net income, determined in accordance with GAAP. The company believes that in order to facilitate a clear understanding of the consolidated historical operating results, both metrics should be examined in conjunction with net income as presented in the consolidated financial statements included on the company’s Annual Report on Form 10-K filed with the SEC on March 24, 2021, and subsequent quarterly filings on Form 10-Q.


 
Total Real Estate Investment is based on aggregate contract purchase price of real estate properties acquired, including acquisition costs and additional capital expenditures incurred since inception, adjusted for cost basis property dispositions over such period. Three Months Ended September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020 Same store rental revenue $ 41,501 $ 41,363 $ 41,296 $ 41,006 $ 40,293 Same store rental expense (2,699) (2,519) (2,550) (2,174) (3,621) Same store NOI 38,802 38,844 38,746 38,832 36,672 Non-same store rental revenue 1,562 2,384 1,126 896 429 Non-same store rental expense (325) (756) (664) (374) (784) General and administrative expenses (6,348) (6,639) (6,623) (6,721) (3,578) Internalization transaction expenses — — — — (2,235) Asset management fees — — — — (4,218) Depreciation and amortization (17,259) (17,615) (18,224) (17,135) (17,002) Impairment loss on real estate (10,241) (6,502) (10,423) — — Impairment loss on goodwill — (431) (240) — — Gain on real estate disposition — — — 439 — Interest and other expense, net (11,737) (9,534) (8,764) (9,428) (9,865) Income from discontinued operations 377,191 16,305 7,948 8,239 5,845 Net income attributable to common stockholders $ 371,645 $ 16,056 $ 2,882 $ 14,748 $ 5,264 The following is a reconciliation of net income attributable to common stockholders, which is the most directly comparable GAAP financial measure, to same store NOI for the following quarterly periods (amounts in thousands): Glossary 24 Page Q3 2021 Same Store Properties are operating properties that were owned and operated for the entirety of all calendar periods being compared and exclude properties under development, healthcare properties classified as held for sale and properties classified as discontinued operations. To evaluate properties on a comparable basis, management analyzes metrics of same store properties in order to assess the core operations of the portfolio. By evaluating the net operating income of the same store properties, management is able to monitor the operations of the company's existing properties for comparable periods to measure the performance of the current portfolio and determine the effects of new acquisitions and dispositions on net income. Occupancy is a weighted average calculation of the portfolio’s occupancy based on rentable square feet. Remaining Lease Term is a weighted average calculation of the portfolio’s remaining lease term based on leased square feet. Rent Escalation is a weighted average calculation of the portfolio’s rent escalations based on leased square feet.