On March 1, 2024 (the “Closing Date”), pursuant to the Agreement and Plan of Merger dated October 29, 2023 (the “Merger Agreement”), by and among the Company, DOC DR Holdco, LLC (formerly known as Alpine Sub, LLC), a wholly owned subsidiary of the Company (“DOC DR Holdco”), DOC DR, LLC (formerly known as Alpine OP Sub, LLC), a wholly owned subsidiary of Healthpeak OP (“DOC DR OP Sub”), Physicians Realty Trust, and Physicians Realty L.P. (the “Physicians Partnership”): (i) Physicians Realty Trust merged with and into DOC DR Holdco (the “Company Merger”), with DOC DR Holdco surviving as a wholly owned subsidiary of the Company (the “Company Surviving Entity”); (ii) immediately following the effectiveness of the Company Merger, the Company contributed all of the outstanding equity interests in the Company Surviving Entity to Healthpeak OP (the “Contribution”); and (iii) immediately following the Contribution, Physicians Partnership merged with and into DOC DR OP Sub (the “Partnership Merger” and, together with the Company Merger, the “Merger”), with DOC DR OP Sub surviving as a subsidiary of Healthpeak OP (the “Partnership Surviving Entity”). Subsequent to the Closing Date, the “Combined Company” means the Company and its subsidiaries.

On the Closing Date and in connection with the Merger, (i) each outstanding common share of beneficial interest of Physicians Realty Trust (“Physicians Realty Trust common shares”) (other than Physicians Realty Trust common shares that were canceled in accordance with the Merger Agreement) was automatically converted into the right to receive 0.674 (the “Exchange Ratio”) shares of the Company’s common stock, and (ii) each outstanding common unit of the Physicians Partnership was converted into common units in the Partnership Surviving Entity equal to the Exchange Ratio.

As a result of the Merger, the Company acquired 299 outpatient medical buildings. As of March 31, 2024, the Company’s property count is comprised of the following: (i) 594 outpatient medical buildings; (ii) 146 lab buildings; (iii) 15 CCRCs; and (iv) 19 senior housing assets in an unconsolidated joint venture. The primary reason for the Merger was to expand the Company’s size, scale, and diversification, in order to further enhance the Company’s competitive advantages and accelerate investment activities.

The Merger was accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”), which requires, among other things, the assets acquired and the liabilities assumed to be recognized at their acquisition date fair value. For accounting purposes, the Company was treated as the accounting acquirer of Physicians Realty Trust. The Company was considered to be the accounting acquirer primarily because: (i) the Company is the entity that transferred consideration to consummate the Merger; (ii) the Company’s stockholders as a group will retain the largest portion of the voting rights of the Combined Company and have the ability to elect, appoint, or remove a majority of the members of the Combined Company’s board of directors; and (iii) its senior management will constitute the majority of management of the Combined Company.


	March 1, 2024
Physicians Realty Trust common shares and Physicians Realty Trust restricted shares, PSUs, and RSUs exchanged(1)	240,699
Exchange Ratio	0.674
Shares of Healthpeak common stock issued	162,231
Closing price of Healthpeak common stock on March 1, 2024(2)	$	17.10
Fair value of Healthpeak common stock issued to the former holders of Physicians Realty Trust common shares, restricted shares, PSUs, and RSUs	2,774,147

Less: Fair value of preliminary share consideration attributable to the post-combination period(3)	(16,223)

Physicians Realty Trust revolving credit facility termination(4)	175,411
Settlement of Physicians Realty Trust’s transaction costs	23,913
Payments made in connection with share settlement(5)	11,315

Preliminary cash consideration	210,639

Consideration transferred	$	2,968,563

(1)Includes 241 million Physicians Realty Trust common shares and Physicians Realty Trust restricted shares outstanding as of March 1, 2024, inclusive of: (i) 200 thousand Physicians Realty Trust restricted shares; (ii) 1 million Physicians Realty Trust common shares issuable pursuant to outstanding Physicians Realty Trust performance-based restricted stock unit (“PSUs”) (reflected at the maximum level of performance); and (iii) 300 thousand Physicians Realty Trust common shares issuable pursuant to outstanding Physicians Realty Trust restricted stock units (“RSUs”).

(3)Represents the fair value of unvested Physicians Realty Trust restricted shares, PSUs, and RSUs attributable to post-combination services that were converted into Healthpeak common stock on the Closing Date in accordance with the Merger Agreement. Although no future service after the Closing Date is required, the value attributable to post-combination services reflects the incremental fair value provided to the Physicians Realty Trust equity award holders and the accelerated vesting of such awards at the Closing Date in accordance with the Merger Agreement. This amount was recognized as transaction and merger-related costs on the Consolidated Statements of Operations.

For the Company’s real estate acquisitions that are accounted for as business combinations, the Company allocates the acquisition consideration (excluding acquisition costs) to the assets acquired, liabilities assumed, and noncontrolling interests at fair value as of the acquisition date. Any excess of the consideration transferred relative to the fair value of the net assets acquired is accounted for as goodwill. Acquisition costs related to business combinations are expensed as incurred. The preliminary estimated fair values of the assets acquired, liabilities assumed, and noncontrolling interests were based on information that was available at the Closing Date. The fair values were determined using standard valuation methodologies, such as the cost, market, and income approach. These methodologies require various assumptions, including those of a market participant.


	March 1, 2024
ASSETS
Real estate:
Buildings and improvements	$	3,199,884
Development costs and construction in progress	68,171
Land and improvements	435,353
Real estate	3,703,408
Loans receivable	118,908
Investments in and advances to unconsolidated joint ventures	58,636
Accounts receivable, net(1)	9,536
Cash and cash equivalents	30,417
Restricted cash	1,007
Intangible assets(2)	890,827
Right-of-use asset	191,415
Other assets	44,691
Total assets	$	5,048,845

LIABILITIES AND EQUITY
Term loans	$	402,320
Senior unsecured notes	1,139,760
Mortgage debt	127,176
Intangible liabilities(3)	149,875
Lease liability	97,160
Accounts payable, accrued liabilities, and other liabilities	72,864

Total liabilities	$	1,989,155

Redeemable noncontrolling interests	1,536

Joint venture partners(4)	20,109
Non-managing member unitholders(5)	116,618
Total noncontrolling interests	$	136,727

Fair value of net assets acquired and liabilities assumed, net of noncontrolling interests	$	2,921,427

Goodwill	47,136

Total purchase price	$	2,968,563

(5)In connection with the Merger, Physicians Partnership merged with and into DOC DR OP Sub with DOC DR OP Sub surviving as the Partnership Surviving Entity. The Company controls the Partnership Surviving Entity via its ownership of its managing member, and the Partnership Surviving Entity is consolidated by the Company. As of March 31, 2024, approximately 7 million DownREIT units of the Partnership Surviving Entity were outstanding (7 million shares of Healthpeak common stock are issuable upon conversion).

As of March 31, 2024, the Company had not finalized the determination of fair value of certain tangible and intangible assets acquired and liabilities assumed including, but not limited to, real estate assets, loans receivable, investments in and advances to unconsolidated joint ventures, intangible assets and liabilities, and goodwill. As such, the assessment of fair value of assets acquired and liabilities assumed is preliminary and was based on information that was available at the time the Consolidated Financial Statements were prepared. The finalization of the purchase accounting assessment could result in material changes in the Company’s determination of the fair value of assets acquired and liabilities assumed, which will be recorded as measurement period adjustments in the period in which they are identified, up to one year from the Closing Date.

A preliminary estimate of approximately $47 million has been allocated to goodwill. The recognized goodwill is attributable to expected synergies, cost savings, acquired workforce, and potential economies of scale benefits from outpatient medical property management and tenant and vendor relationships following the closing of the Merger. None of the goodwill recognized is expected to be deductible for tax purposes.

During the three months ended March 31, 2024, the Company incurred approximately $107 million of merger-related costs, which primarily related to advisory, legal, accounting, tax, post-combination severance and stock compensation expense, and other costs. Included in this amount is: (i) $38 million of fees paid to investment banks and advisors to help the Company negotiate the terms of the transactions contemplated by the Merger Agreement and to advise the Company on other merger-related matters, inclusive of $21 million of success-based fees incurred upon consummation of the Merger, (ii) $26 million of severance expense due to certain Physicians Realty Trust dual-trigger severance arrangements that are required to be recognized as post-combination expense in accordance with ASC 805, (iii) $16 million of post-combination stock compensation expense for the accelerated vesting of Physicians Realty Trust equity awards pursuant to the terms of the Merger Agreement, based on the fair value of Healthpeak common stock issued to holders of Physicians Realty Trust equity awards, (iv) $19 million of legal, accounting, tax, and other costs, and (v) $8 million of severance expense related to legacy Healthpeak employees. The Company expects to incur approximately $5 million of additional severance expense related to legacy Healthpeak employees through the end of 2024. These merger-related costs are included in transaction and merger-related costs on the Consolidated Statements of Operations.

During the three months ended March 31, 2024, in connection with the Merger, several lawsuits were filed by purported stockholders of the Company and purported shareholders of Physicians Realty Trust against the Company, members of the Company’s Board of Directors, Physicians Realty Trust, and/or members of the Physicians Realty Trust board of trustees challenging the disclosures made in the Company’s Registration Statement on Form S-4 filed with the SEC on December 15, 2023. No loss contingency was recorded for these matters as of March 31, 2024 as the Company believed that losses related to the lawsuits were not probable. As of April 2024, all complaints relating to the Merger that were filed against the Company have been voluntarily dismissed.

The following unaudited pro forma information presents a summary of the results of operations for the Combined Company, as if the Merger had been consummated on January 1, 2023 (in thousands). The following unaudited pro forma financial information is not necessarily indicative of the results of operations had the acquisition been effected on the assumed date, nor is it necessarily an indication of trends in future results for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the unaudited pro forma financial information, cost savings from operating efficiencies, potential synergies, and the impact of incremental costs incurred in integrating the businesses.

The unaudited pro forma financial information above includes a nonrecurring significant adjustment made to account for certain costs incurred as if the Merger had been completed on January 1, 2023. Transaction and merger-related costs of $107 million were excluded from the unaudited pro forma financial information for the three months ended March 31, 2024, but included for the three months ended March 31, 2023. The three months ended March 31, 2023 also includes $11 million of transaction costs that were recognized during the year ended December 31, 2023.