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(Mark One)
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2018
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OR
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
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Maryland
(State or Other Jurisdiction of
Incorporation or Organization)
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46-5212033
(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common stock, $0.01 par value per share
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New York Stock Exchange
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Large accelerated filer
¨
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Accelerated filer
x
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Non-accelerated filer
¨
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Smaller reporting company
x
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Emerging growth company
x
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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•
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defaults on or non-renewal of leases by tenants;
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•
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adverse economic or real estate developments, either nationally or in the markets in which our properties are located;
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•
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decreased rental rates or increased vacancy rates;
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•
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difficulties in identifying healthcare properties to acquire and completing acquisitions;
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•
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our ability to make distributions on our shares of stock;
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•
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our dependence upon key personnel whose continued service is not guaranteed;
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•
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our ability to identify, hire and retain highly qualified personnel in the future;
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•
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the degree and nature of our competition;
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•
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general economic conditions;
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•
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the availability, terms and deployment of debt and equity capital;
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•
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general volatility of the market price of our common stock;
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•
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changes in our business or strategy;
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•
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changes in governmental regulations, tax rates and similar matters;
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•
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new laws or regulations or changes in existing laws and regulations that may adversely affect the healthcare industry;
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•
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trends or developments in the healthcare industry that may adversely affect our tenants;
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•
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competition for acquisition opportunities;
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•
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our failure to successfully develop, integrate and operate acquired properties and operations;
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•
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our ability to operate as a public company;
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•
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changes in accounting principles generally accepted in the United States of America (“GAAP”);
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•
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our failure to generate sufficient cash flows to service our outstanding indebtedness;
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•
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fluctuations in interest rates and increased operating costs;
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•
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our increased vulnerability economically due to the concentration of our investments in healthcare properties;
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•
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a substantial portion of our revenue is derived from our largest tenants and thus, the bankruptcy, insolvency or weakened financial position of any one of them could seriously harm our operating results and financial condition;
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•
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geographic concentrations in
Illinois
,
Ohio
, and
Florida
causes us to be particularly exposed to downturns in these local economies or other changes in local real estate market conditions;
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•
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lack of or insufficient amounts of insurance;
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•
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other factors affecting the real estate industry generally;
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•
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our failure to maintain our qualification as a real estate investment trust (“REIT”) for U.S. federal income tax purposes;
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•
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limitations imposed on our business and our ability to satisfy complex rules in order for us to maintain our status as a REIT for U.S. federal income tax purposes; and
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•
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changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates and taxation of REITs.
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(Dollars in thousands)
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Number of Properties
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Gross Investment
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|||
Medical office buildings
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35
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$
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164,133
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Physician clinics
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20
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49,625
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Surgical centers and hospitals
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15
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75,788
|
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Specialty centers
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25
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71,726
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Behavioral facilities
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7
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|
66,551
|
|
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Long-term acute care hospitals
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1
|
|
14,928
|
|
|
|
103
|
|
442,751
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|
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Corporate property
|
—
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2,179
|
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Total real estate investments
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103
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$
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444,930
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•
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Strong, Diversified Portfolio.
Our focus is on investing in properties where we can develop strategic alliances with financially sound healthcare providers that offer need-based healthcare services in our target markets. Our tenant base includes many nationally recognized healthcare providers (or their affiliates) and our property portfolio has significant diversification with respect to healthcare provider, industry segment, and facility type.
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•
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Attractive and Disciplined Investment Focus.
We focus on healthcare facilities in our target submarkets which are off-market or lightly marketed transactions at purchase prices generally between $5 million and $30 million. We believe there is significantly less competition from existing REITs and institutional buyers for assets in these target submarkets than for comparable urban assets, thereby increasing the potential for more attractive risk-adjusted returns. In addition, we believe that healthcare-related real estate rents and valuations are less susceptible to changes in the general economy than many other types of commercial real estate due to favorable demographic trends and the need-based rise in healthcare expenditures, even during economic downturns.
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•
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Extensive Relationships with Healthcare Providers, Intermediaries and Property Owners.
We believe that our management team has a strong reputation among, and a deep understanding of the real estate needs of, healthcare providers in our target submarkets. In addition, we have strategic relationships which we believe gives us the ability to meet the needs of healthcare providers by structuring transactions that are mutually advantageous to sellers, our tenants and us. We believe this ability has, and will continue to, lead to strategic acquisition opportunities, which will, in turn, produce attractive risk-adjusted returns. None of our properties to date were acquired pursuant to "calls for offers" or other auction style bidding situations. We believe our relationships provide us with additional off-market or lightly marketed acquisition opportunities, thus providing us the opportunity to continue to purchase assets outside a competitive bidding process.
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•
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Experienced Management Team.
Each of the members of our executive management team has over 30 years of healthcare, real estate and/or public REIT management experience. Led by Timothy G. Wallace, our Chairman, Chief Executive Officer and President, W. Page Barnes, our Executive Vice President and Chief Financial Officer, and Leigh Ann Stach, our Vice President-Financial Reporting and Chief Accounting Officer, our management team has significant experience in acquiring, owning, operating and managing healthcare facilities and providing full service real estate solutions for the healthcare industry. Prior to founding our company, Mr. Wallace was a co-founder and Executive Vice President of Healthcare Realty Trust (NYSE: HR). Between the initial public offering of HR in 1993 and his departure from HR in 2002, Mr. Wallace was integral in helping to grow HR to over $2 billion in assets. Mr. Barnes has held executive positions with acute care and behavioral hospital companies and directed healthcare lending for
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•
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Growth Oriented Capital Structure.
At
December 31, 2018
, we had
$43.0 million
outstanding on our revolving credit facility and had
$100.0 million
outstanding on our term loans under our second amended and restated Credit Agreement (collectively, our "Credit Facility") with a
35.2%
debt-to-book capitalization ratio. In the future, in addition to equity and debt issuances, we may also use OP units of our operating partnership as currency to acquire additional properties from owners seeking to defer their potential taxable gain and diversify their holdings. We believe that the borrowing capacity under our Credit Facility, combined with our ability to use OP units as acquisition currency, provides us with significant financial flexibility to make opportunistic investments and fund future growth.
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•
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Significant Alignment of Interests.
We have structured the compensation of our board and management team to closely align their interests with the interests of our stockholders. The Company's named executive officers have elected to take 100% of their total compensation in restricted stock since the Company's initial public offering, or IPO, in May 2015, subject to an eight-year cliff-vesting period. The Company's board of directors have elected to take 88% of their total compensation in restricted stock since the Company's IPO, subject to a three-year cliff-vesting period. We believe that paying our board and management team with restricted stock that is subject to long-term cliff-vesting periods effectively aligns the interests of our board and management with those of our stockholders, creating significant incentives to maximize returns for our stockholders. In addition, concurrently with the completion of our IPO in May 2015 and our follow-on offering in 2016, Mr. Wallace purchased over $2.6 million in shares of our common stock and certain of our officers and directors purchased an aggregate of $450,000 in shares of our common stock in concurrent private placements in each case at a price per share equal to the price of the shares sold in the IPO or follow-on offering, as applicable. Further, Mr. Wallace has purchased 178,213 shares of our common stock under 10b5-1 plans that he had in place between 2016 and 2017, which we believe further aligns management's interests with our stockholders. Finally, we have adopted, and each officer and director has met, stock ownership guidelines that require our officers and directors to continuously own an amount of our common stock based on a multiple of such officer's annual base salary or such director's annual retainer, as applicable, other than one member of our board that joined the board during 2018.
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•
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whether the property will be leased to a financially-sound healthcare tenant;
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•
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the historical performance of the market and its future prospects;
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•
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property location, with an emphasis on proximity to a population base;
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•
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demand for healthcare related services and facilities;
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•
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current and future supply of competing properties;
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•
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occupancy and rental rates in the market;
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•
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population density and growth potential;
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•
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anticipated capital expenditures;
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•
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anticipated future acquisition opportunities; and
|
•
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existing and potential competition from other healthcare real estate owners and tenants.
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•
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the Affordable Care Act and proposed amendments and any further repeal measures and related actions at the federal and state level;
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•
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the repeal of a portion of the Affordable Care Act (effective in 2019) for the mandate that all individual's purchase health insurance or pay a tax penalty;
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•
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quality control, cost containment, and payment system reforms for Medicaid, Medicare and other public funding, such as expansion of pay-for-performance criteria and value-based purchasing programs, bundled provider payments, accountable care organizations, increased patient cost-sharing, geographic payment variations, comparative effectiveness research, and lower payments for hospital readmissions;
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•
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implementation of health insurance exchanges and regulations governing their operation, whether run by the state or by the federal government, whereby individuals and small businesses purchase health insurance, including government-funded plans, many assisted by federal subsidies that are under ongoing legal challenges;
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•
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equalization of Medicare payment rates across different facility-type settings (i.e.; the Bipartisan Budget Act of 2015, Section 603, lowered Medicare payment rates, effective January 1, 2017, for services provided in off-campus, provider-based outpatient departments to the same level of rates for physician-office settings for those facilities not grandfathered-in under the current Medicare rates as of the law’s date of enactment, November 2, 2015);
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•
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the continued adoption by providers of federal standards for, and the associated audits of, the meaningful-use of electronic health records and the transition to ICD-10 coding;
|
•
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an increased flexibility from the Trump Administration to grant Medicaid waivers, including work and job training requirements, which could decrease Medicaid coverage;
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•
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a continuing trend of provider consolidation and associated antitrust scrutiny; and
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•
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tax law changes affecting non-profit providers, including the 2017 act's effect on charitable contributions.
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•
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the extent of investor interest in our Company and our assets;
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•
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our ability to satisfy the distribution requirements applicable to REITs;
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•
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the general reputation of REITs and the attractiveness of their equity securities in comparison to other equity securities, including securities issued by other real estate-based companies;
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•
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our financial performance and that of our tenants;
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•
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analyst reports about us and the REIT industry;
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•
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macroeconomic conditions generally and conditions affecting the healthcare and real estate industry in particular;
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•
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general stock and bond market conditions, including changes in interest rates on fixed income securities, which may lead prospective purchasers of our common stock to demand a higher annual yield from future distributions;
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•
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a failure to maintain or increase our dividend which is dependent, in large part, upon funds from operations, or FFO, which, in turn, depends upon increased revenue from additional acquisitions and rental increases; and
|
•
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other factors such as governmental regulatory action and changes in REIT tax laws.
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•
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we may be unable to obtain financing for development projects on favorable terms or at all;
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•
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we may not complete development projects on schedule or within budgeted amounts;
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•
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we may encounter delays in obtaining or fail to obtain all necessary zoning, land use, building, occupancy, environmental and other governmental permits and authorizations, or underestimate the costs necessary to develop the property to market standards;
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•
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development or construction delays may provide tenants the right to terminate preconstruction leases or cause us to incur additional costs;
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•
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volatility in the price of construction materials or labor may increase our development costs;
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•
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hospitals or health systems may maintain significant decision-making authority with respect to the development schedule;
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•
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we may incorrectly forecast risks associated with development in new geographic regions;
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•
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tenants may not lease space at the quantity or rental rate levels projected;
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•
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demand for our development project may decrease prior to completion, including due to competition from other developments; and
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•
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lease rates and rents at newly developed properties may fluctuate based on factors beyond our control, including market and economic conditions.
|
•
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changes in the demand for and methods of delivering healthcare services;
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•
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changes in third party reimbursement methods and policies;
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•
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increased attention to compliance with regulations designed to safeguard protected health information and cyber-attacks on entities;
|
•
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consolidation and pressure to integrate within the healthcare industry through acquisitions and joint ventures; and
|
•
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increased scrutiny of billing, referral and other practices by U.S. federal and state authorities.
|
•
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the federal Anti-Kickback Statute, which prohibits, among other things, the offer, payment, solicitation or receipt of any form of remuneration in return for, or to induce, the referral of any federal or state healthcare program patients;
|
•
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the Stark Law, which, subject to specific exceptions, restricts physicians who have financial relationships with healthcare providers from making referrals for designated health services for which payment may be made under Medicare or Medicaid programs to an entity with which the physician, or an immediate family member, has a financial relationship;
|
•
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the federal False Claims Act, which prohibits any person from knowingly presenting false or fraudulent claims for payment to the federal government, including under the Medicare and Medicaid programs;
|
•
|
the federal Civil Monetary Penalties Law, which authorizes the Department of Health and Human Services, or HHS, to impose monetary penalties for certain fraudulent acts; and
|
•
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state anti-kickback, anti-inducement, anti-referral and insurance fraud laws which may be generally similar to, and potentially more expansive than, the federal laws set forth above.
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•
|
provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act;
|
•
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comply with any new or revised financial accounting standards applicable to public companies until such standards are also applicable to private companies (we have irrevocably elected not to avail ourselves of this exemption);
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•
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comply with any new audit rules or requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, after April 5, 2012 unless the SEC determines otherwise, including requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and our financial statements;
|
•
|
provide certain disclosure regarding executive compensation required of larger public companies; or
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•
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hold stockholder advisory votes on executive compensation.
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•
|
our cash flow may be insufficient to meet required principal and interest payments;
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•
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we may be unable to borrow additional funds as needed or on favorable terms, including to make acquisitions;
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•
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we may be unable to refinance indebtedness at maturity or the refinancing terms may be less favorable than the terms of the original indebtedness;
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•
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because a portion of our debt bears interest at variable rates, an increase in interest rates could materially increase our interest expense;
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•
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we may fail to effectively hedge against interest rate volatility;
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•
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we may be forced to dispose of properties, possibly on disadvantageous terms if we are able to do so at all, in order to repay indebtedness;
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•
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after debt service, the amount available for distributions to our stockholders may be reduced;
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•
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we may default on our debt obligations, which could restrict our ability to make any distributions to our stockholders;
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•
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our ability to make distributions to our stockholders could be restricted by our debt agreements;
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•
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our leverage could place us at a competitive disadvantage compared to our competitors who have less debt;
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•
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we may experience increased vulnerability to economic and industry downturns, reducing our ability to respond to changing business and economic conditions;
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•
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we may default on our obligations and the lenders may foreclose on properties that secure their loans and receive an assignment of rents and leases;
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•
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we may violate financial covenants, which would cause a default on our obligations and result in the acceleration of our payment obligations;
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•
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we may inadvertently violate non-financial restrictive covenants in our loan documents, such as covenants that require us to maintain the existence of entities, maintain insurance policies and provide financial statements, which would entitle the lenders to accelerate our debt obligations; and
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•
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our default under any loan with cross-default or cross-collateralization provisions could result in default on other indebtedness or result in the foreclosures of other properties.
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•
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“business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate or associate of ours who was the beneficial owner, directly or indirectly, of 10% or more of the voting power of our shares at any time
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•
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“control share” provisions that provide that holders of “control shares” of our company (defined as shares that, when aggregated with all other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of issued and outstanding “control shares,” subject to certain exceptions) have no voting rights with respect to their control shares, except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
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•
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redemption rights of qualifying parties;
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•
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a requirement that we may not be removed as the general partner of our operating partnership without our consent;
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•
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transfer restrictions on OP units; and
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•
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our ability, as general partner, in some cases, to amend the partnership agreement and to cause our operating partnership to issue additional partnership interests with terms that could delay, defer or prevent a merger or other change of control of us or our operating partnership without the consent of our stockholders or the limited partners.
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•
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actual receipt of an improper benefit or profit in money, property or services; or
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•
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active and deliberate dishonesty by the director or officer that was established by a final judgment as being material to the cause of action adjudicated.
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•
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we would not be allowed a deduction for dividends paid to stockholders in computing our taxable income and would be subject to U.S. federal income tax at regular corporate rates;
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•
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we could be subject to increased state and local taxes; and
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•
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unless we are entitled to relief under certain U.S. federal income tax laws, we could not re-elect REIT status until the fifth calendar year after the year in which we failed to qualify as a REIT.
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•
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actual or anticipated variations in our quarterly operating results or dividends;
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•
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changes in our FFO or earnings estimates;
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•
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publication of research reports about us or the real estate industry;
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•
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increases in market interest rates that lead purchasers of our shares to demand a higher yield;
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•
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changes in market valuations of similar companies;
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•
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adverse market reaction to any additional debt we incur in the future;
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•
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additions or departures of key management personnel;
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•
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actions by institutional stockholders;
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•
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speculation in the press or investment community;
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•
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the realization of any of the other risk factors presented in this report;
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•
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the extent of investor interest in our securities;
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•
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the general reputation of REITs and the attractiveness of our equity securities in comparison to other equity securities, including securities issued by other real estate-based companies;
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•
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our underlying asset value;
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•
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investor confidence in the stock and bond markets generally;
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•
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changes in tax laws;
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•
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future equity issuances by us;
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•
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failure to meet earnings estimates;
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•
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failure to meet and maintain REIT qualification;
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•
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changes in our credit ratings; and
|
•
|
general market and economic conditions.
|
|
|
Total Leased Square Footage
|
Annualized Lease Revenue
|
||||||||
Year
|
Number of Leases Expiring
|
Amount
|
Percent (%)
|
Amount
(in millions)
|
Percent (%)
|
||||||
2019
|
38
|
|
169,388
|
|
8.8
|
%
|
$
|
3,941
|
|
9.6
|
%
|
2020
|
37
|
|
194,355
|
|
10.1
|
%
|
3,744
|
|
9.1
|
%
|
|
2021
|
23
|
|
172,701
|
|
8.9
|
%
|
3,501
|
|
8.5
|
%
|
|
2022
|
29
|
|
193,158
|
|
10.0
|
%
|
4,185
|
|
10.2
|
%
|
|
2023
|
36
|
|
210,555
|
|
10.9
|
%
|
4,115
|
|
10.0
|
%
|
|
2024
|
6
|
|
42,856
|
|
2.2
|
%
|
1,178
|
|
2.9
|
%
|
|
2025
|
11
|
|
116,188
|
|
6.0
|
%
|
3,480
|
|
8.5
|
%
|
|
2026
|
8
|
|
132,491
|
|
6.9
|
%
|
3,179
|
|
7.7
|
%
|
|
2027
|
2
|
|
18,651
|
|
1.0
|
%
|
434
|
|
1.1
|
%
|
|
2028
|
3
|
|
41,573
|
|
2.2
|
%
|
592
|
|
1.4
|
%
|
|
Thereafter
|
28
|
|
633,448
|
|
32.7
|
%
|
12,662
|
|
30.8
|
%
|
|
Month-to-Month
|
4
|
|
5,600
|
|
0.3
|
%
|
85
|
|
0.2
|
%
|
|
Totals
|
225
|
|
1,930,964
|
|
100.0
|
%
|
$
|
41,096
|
|
100.0
|
%
|
|
Period Ending
|
||||||||||||||
Index
|
5/21/2015
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2017
|
|
12/31/2018
|
|
|||||
Community Healthcare Trust Incorporated
|
$
|
100.00
|
|
$
|
95.98
|
|
$
|
129.42
|
|
$
|
167.99
|
|
$
|
182.80
|
|
Russell 3000 Index
|
$
|
100.00
|
|
$
|
95.92
|
|
$
|
108.14
|
|
$
|
130.99
|
|
$
|
124.12
|
|
NAREIT All Equity REIT Index
|
$
|
100.00
|
|
$
|
103.15
|
|
$
|
112.05
|
|
$
|
121.77
|
|
$
|
116.84
|
|
•
|
we are exempt from the requirement to obtain an attestation and report from our auditors on the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act;
|
•
|
we are permitted to provide less extensive disclosure about our executive compensation arrangements; and
|
•
|
we are not required to give our stockholders non-binding advisory votes on executive compensation or golden parachute arrangements.
|
◦
|
approximately
one and a half
monthly rental payments in cash, reimbursement of expenses and late fees totaling approximately
$0.3 million
(
$0.018
per diluted share of FFO); and
|
◦
|
approximately
four
months of interest payments and late fees totaling approximately
$0.2 million
(
$0.011
per diluted share of FFO).
|
(Dollars in thousands)
|
Total
|
|
Less Than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than
5 Years
|
||||||||||
Revolving Credit Facility
(1)
|
$
|
44,407
|
|
|
$
|
44,407
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Terms Loans
(2)
|
118,992
|
|
|
4,445
|
|
|
61,703
|
|
|
52,844
|
|
|
—
|
|
|||||
Mortgage note payable
|
8,101
|
|
|
631
|
|
|
1,894
|
|
|
5,576
|
|
|
—
|
|
|||||
Tenant improvements
(3)
|
2,806
|
|
|
2,806
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital improvements
|
377
|
|
|
377
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
$
|
174,683
|
|
|
$
|
52,666
|
|
|
$
|
63,597
|
|
|
$
|
58,420
|
|
|
$
|
—
|
|
•
|
Acquisitions during 2018 contributed revenues of approximately $2.5 million in 2018; and
|
•
|
Acquisitions during 2017 contributed an increase in revenues of approximately $8.5 million in 2018.
|
•
|
Acquisitions during 2018 accounted for an increase of approximately $0.5 million in 2018; and
|
•
|
Acquisitions during 2017 accounted for an increase of approximately $0.9 million in 2018.
|
•
|
Depreciation and amortization related to properties acquired during 2018 accounted for an increase of approximately $1.2 million in 2018;
|
•
|
Depreciation and amortization related to properties acquired during 2017 accounted for an increase of approximately $3.3 million in 2018; and
|
•
|
Real estate intangible assets acquired in 2015 and 2016 that became fully depreciated resulted in a decrease of approximately $2.7 million in 2018.
|
•
|
In the first quarter of 2017, the Company borrowed $60.0 million in Term Loans and borrowed the remaining $40.0 million in Term Loans in the first quarter of 2018. These Term Loans resulted in additional interest expense in 2018 of approximately $1.9 million;
|
•
|
The Company amended its Credit Facility in the first quarter of 2017 and in the first quarter of 2018 resulting in additional financing fees which the Company deferred and are amortizing through the maturity date of the Credit Facility. The Company recognized additional amortization in 2018 related to these fees of approximately $0.1 million; and
|
•
|
Interest expense related to our Revolving Credit Facility increased approximately $0.3 million due mainly to higher interest rates and a higher weighted average debt balance in 2018 compared to 2017.
|
•
|
Acquisitions during 2017 contributed revenues of approximately $6.7 million in 2017;
|
•
|
Acquisitions during 2016, including one mortgage note that was subsequently converted upon the acquisition of the real estate securing the note, contributed an increase in revenues of approximately $7.0 million in 2017; and
|
•
|
Revenues for 2017 decreased approximately $1.6 million related to the properties acquired during 2015 due to a reduction in tenant reimbursement revenue impacted by a reduction in operating expenses on certain properties, as well as decrease in revenues from the loss of certain tenants.
|
•
|
Acquisitions during 2017 accounted for an increase of approximately $0.9 million in 2017;
|
•
|
Acquisitions during 2016 accounted for an increase of approximately $1.7 million in 2017;
|
•
|
We recorded contingent consideration related to three acquisitions during 2015 and 2016 and we recorded adjustments to the fair value of these contingent considerations during 2016 which resulted in a reduction to property operating expense during 2016 of approximately
$1.3 million
.
|
•
|
Depreciation and amortization related to properties acquired during 2017 accounted for an increase of approximately $2.9 million in 2017;
|
•
|
Depreciation and amortization related to properties acquired during 2016 accounted for an increase of approximately $3.4 million in 2017; and
|
•
|
Real estate intangible assets acquired in 2015 that became fully depreciated resulted in a decrease of approximately $1.8 million in 2017.
|
•
|
In the first quarter of 2017, the Company amended its Credit Facility and borrowed $60.0 million in Term Loans which resulted in additional interest expense during 2017 of approximately $2.2 million;
|
•
|
Interest related to our Revolving Credit Facility increased approximately $0.6 million due mainly to an increase in our weighted average interest rate during 2017.
|
•
|
Leverage ratios and financial covenants included in our Credit Facility;
|
•
|
Dividend payout percentage; and
|
•
|
Interest rates, underlying treasury rates, debt market spreads and equity markets.
|
|
Year Ended December 31,
|
||||||||||
(Amounts in thousands, except per share amounts)
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
4,403
|
|
|
$
|
3,510
|
|
|
$
|
2,721
|
|
Real estate depreciation and amortization
|
19,661
|
|
|
17,714
|
|
|
13,191
|
|
|||
Gain from sale of depreciable real estate
|
(295
|
)
|
|
—
|
|
|
—
|
|
|||
Total adjustments
|
19,366
|
|
|
17,714
|
|
|
13,191
|
|
|||
Funds from Operations
|
$
|
23,769
|
|
|
$
|
21,224
|
|
|
$
|
15,912
|
|
Funds from Operations per Common Share-Basic
|
$
|
1.35
|
|
|
$
|
1.43
|
|
|
$
|
1.42
|
|
Funds from Operations per Common Share-Diluted
|
$
|
1.32
|
|
|
$
|
1.41
|
|
|
$
|
1.41
|
|
Weighted Average Common Shares Outstanding-Basic
|
17,669
|
|
|
14,815
|
|
|
11,238
|
|
|||
Weighted Average Common Shares Outstanding-Diluted
(1)
|
17,943
|
|
|
15,002
|
|
|
11,320
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Real estate properties
|
|
|
|
||||
Land and land improvements
|
$
|
50,270
|
|
|
$
|
44,419
|
|
Buildings, improvements, and lease intangibles
|
394,527
|
|
|
343,955
|
|
||
Personal property
|
133
|
|
|
112
|
|
||
Total real estate properties
|
444,930
|
|
|
388,486
|
|
||
Less accumulated depreciation
|
(55,298
|
)
|
|
(36,136
|
)
|
||
Total real estate properties, net
|
389,632
|
|
|
352,350
|
|
||
Cash and cash equivalents
|
2,007
|
|
|
2,130
|
|
||
Restricted cash
|
385
|
|
|
—
|
|
||
Mortgage note receivable, net
|
—
|
|
|
10,633
|
|
||
Other assets, net
|
34,546
|
|
|
20,653
|
|
||
Total assets
|
$
|
426,570
|
|
|
$
|
385,766
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Debt, net
|
$
|
147,766
|
|
|
$
|
93,353
|
|
Accounts payable and accrued liabilities
|
3,196
|
|
|
4,056
|
|
||
Other liabilities
|
3,949
|
|
|
4,983
|
|
||
Total liabilities
|
154,911
|
|
|
102,392
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders' Equity
|
|
|
|
||||
Preferred stock, $0.01 par value; 50,000,000 shares authorized; none issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 450,000,000 shares authorized; 18,634,502 and 18,085,798 shares issued and outstanding at December 31, 2018 and 2017, respectively
|
186
|
|
|
181
|
|
||
Additional paid-in capital
|
337,180
|
|
|
324,303
|
|
||
Cumulative net income
|
9,178
|
|
|
4,775
|
|
||
Accumulated other comprehensive income
|
633
|
|
|
258
|
|
||
Cumulative dividends
|
(75,518
|
)
|
|
(46,143
|
)
|
||
Total stockholders’ equity
|
271,659
|
|
|
283,374
|
|
||
Total liabilities and stockholders' equity
|
$
|
426,570
|
|
|
$
|
385,766
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
REVENUES
|
|
|
|
|
|
||||||
Rental income
|
$
|
40,149
|
|
|
$
|
31,071
|
|
|
$
|
18,999
|
|
Tenant reimbursements
|
6,377
|
|
|
5,071
|
|
|
4,564
|
|
|||
Mortgage interest
|
—
|
|
|
1,022
|
|
|
1,634
|
|
|||
Other operating interest
|
2,104
|
|
|
179
|
|
|
—
|
|
|||
|
48,630
|
|
|
37,343
|
|
|
25,197
|
|
|||
|
|
|
|
|
|
||||||
EXPENSES
|
|
|
|
|
|
||||||
Property operating
|
9,944
|
|
|
8,682
|
|
|
4,744
|
|
|||
General and administrative
|
5,707
|
|
|
4,020
|
|
|
3,383
|
|
|||
Depreciation and amortization
|
19,539
|
|
|
17,732
|
|
|
13,201
|
|
|||
|
35,190
|
|
|
30,434
|
|
|
21,328
|
|
|||
|
|
|
|
|
|
||||||
INCOME BEFORE INCOME TAXES AND OTHER ITEMS
|
13,440
|
|
|
6,909
|
|
|
3,869
|
|
|||
Gain on sale of real estate
|
295
|
|
|
—
|
|
|
—
|
|
|||
Interest expense
|
(6,299
|
)
|
|
(3,948
|
)
|
|
(1,178
|
)
|
|||
Impairment of note receivable
|
(5,000
|
)
|
|
—
|
|
|
—
|
|
|||
Income tax benefit
|
1,547
|
|
|
478
|
|
|
—
|
|
|||
Interest and other income, net
|
420
|
|
|
71
|
|
|
30
|
|
|||
NET INCOME
|
$
|
4,403
|
|
|
$
|
3,510
|
|
|
$
|
2,721
|
|
|
|
|
|
|
|
||||||
INCOME PER COMMON SHARE
|
|
|
|
|
|
||||||
Net income per common share – Basic
|
$
|
0.19
|
|
|
$
|
0.19
|
|
|
$
|
0.24
|
|
Net income per common share – Diluted
|
$
|
0.19
|
|
|
$
|
0.19
|
|
|
$
|
0.24
|
|
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING-BASIC
|
17,668,696
|
|
|
14,815,258
|
|
|
11,238,437
|
|
|||
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING-DILUTED
|
17,668,696
|
|
|
14,815,258
|
|
|
11,319,505
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
|
|
||||||
NET INCOME
|
$
|
4,403
|
|
|
$
|
3,510
|
|
|
$
|
2,721
|
|
||
|
Other comprehensive income:
|
|
|
|
|
|
|||||||
|
|
Increase (decrease) in fair value of cash flow hedges
|
182
|
|
|
(144
|
)
|
|
—
|
|
|||
|
|
Reclassification of amounts recognized as interest expense
|
193
|
|
|
402
|
|
|
—
|
|
|||
|
Total other comprehensive income
|
375
|
|
|
258
|
|
|
—
|
|
||||
COMPREHENSIVE INCOME
|
$
|
4,778
|
|
|
$
|
3,768
|
|
|
$
|
2,721
|
|
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Additional
Paid in
Capital
|
|
Cumulative
Net Income
(Loss)
|
|
Accumulated Other Comprehensive Income
|
|
Cumulative
Dividends
|
|
Total
Stockholders'
Equity
|
||||||||||||||||
Balance at December 31, 2015
|
—
|
|
|
$
|
—
|
|
|
7,596,940
|
|
|
$
|
76
|
|
|
$
|
127,578
|
|
|
$
|
(1,456
|
)
|
|
$
|
—
|
|
|
$
|
(3,928
|
)
|
|
$
|
122,270
|
|
Issuance of common stock, net of offering costs
|
—
|
|
|
—
|
|
|
5,175,000
|
|
|
52
|
|
|
86,073
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86,125
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
216,542
|
|
|
2
|
|
|
672
|
|
|
—
|
|
|
|
|
|
—
|
|
|
674
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,721
|
|
|
|
|
|
—
|
|
|
2,721
|
|
|||||||
Dividends to common stockholders ($1.525 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
(17,783
|
)
|
|
(17,783
|
)
|
|||||||
Balance at December 31, 2016
|
—
|
|
|
$
|
—
|
|
|
12,988,482
|
|
|
$
|
130
|
|
|
$
|
214,323
|
|
|
$
|
1,265
|
|
|
$
|
—
|
|
|
$
|
(21,711
|
)
|
|
$
|
194,007
|
|
Issuance of common stock, net of offering costs
|
—
|
|
|
—
|
|
|
4,887,500
|
|
|
49
|
|
|
108,508
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
108,557
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
209,816
|
|
|
2
|
|
|
1,472
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,474
|
|
|||||||
Unrecognized loss on cash flow hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(144
|
)
|
|
—
|
|
|
(144
|
)
|
|||||||
Reclassification adjustment for losses included in net income (interest expense)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
402
|
|
|
—
|
|
|
402
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,510
|
|
|
—
|
|
|
—
|
|
|
3,510
|
|
|||||||
Dividends to common stockholders ($1.565 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,432
|
)
|
|
(24,432
|
)
|
|||||||
Balance at December 31, 2017
|
—
|
|
|
$
|
—
|
|
|
18,085,798
|
|
|
$
|
181
|
|
|
$
|
324,303
|
|
|
$
|
4,775
|
|
|
$
|
258
|
|
|
$
|
(46,143
|
)
|
|
$
|
283,374
|
|
Issuance of common stock, net of offering costs
|
—
|
|
|
—
|
|
|
334,700
|
|
|
3
|
|
|
10,027
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,030
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
214,004
|
|
|
2
|
|
|
2,850
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,852
|
|
|||||||
Unrecognized gain on cash flow hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
182
|
|
|
—
|
|
|
182
|
|
|||||||
Reclassification adjustment for losses included in net income (interest expense)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
193
|
|
|
—
|
|
|
193
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,403
|
|
|
—
|
|
|
—
|
|
|
4,403
|
|
|||||||
Dividends to common stockholders ($1.605 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,375
|
)
|
|
(29,375
|
)
|
|||||||
Balance at December 31, 2018
|
—
|
|
|
$
|
—
|
|
|
18,634,502
|
|
|
$
|
186
|
|
|
$
|
337,180
|
|
|
$
|
9,178
|
|
|
$
|
633
|
|
|
$
|
(75,518
|
)
|
|
$
|
271,659
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income
|
$
|
4,403
|
|
|
$
|
3,510
|
|
|
$
|
2,721
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
20,168
|
|
|
18,153
|
|
|
13,383
|
|
|||
Stock-based compensation
|
2,852
|
|
|
1,474
|
|
|
674
|
|
|||
Straight-line rent
|
(1,212
|
)
|
|
(1,303
|
)
|
|
(606
|
)
|
|||
Provision for bad debts, net of recoveries
|
60
|
|
|
67
|
|
|
155
|
|
|||
Gain on sale of real estate property
|
(295
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment of note receivable
|
5,000
|
|
|
—
|
|
|
—
|
|
|||
Reduction in contingent purchase price
|
—
|
|
|
(5
|
)
|
|
(1,279
|
)
|
|||
Deferred income tax benefit
|
(1,547
|
)
|
|
(478
|
)
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Other assets
|
(2,222
|
)
|
|
(1,090
|
)
|
|
(1,956
|
)
|
|||
Accounts payable and accrued liabilities
|
(1,251
|
)
|
|
402
|
|
|
2,127
|
|
|||
Other liabilities
|
(1,515
|
)
|
|
1,397
|
|
|
(290
|
)
|
|||
Net cash provided by operating activities
|
24,441
|
|
|
22,127
|
|
|
14,929
|
|
|||
|
|
|
|
|
|
||||||
INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Acquisitions of real estate
|
(45,185
|
)
|
|
(133,505
|
)
|
|
(103,206
|
)
|
|||
Disposition of real estate
|
3,176
|
|
|
—
|
|
|
—
|
|
|||
Acquisition and funding of mortgage and other notes receivable
|
(2,201
|
)
|
|
(13,750
|
)
|
|
(12,406
|
)
|
|||
Funding of notes receivable
|
(4,833
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from repayments on notes receivable
|
92
|
|
|
833
|
|
|
104
|
|
|||
Capital expenditures on existing real estate properties
|
(4,557
|
)
|
|
(1,132
|
)
|
|
(1,579
|
)
|
|||
Net cash used in investing activities
|
(53,508
|
)
|
|
(147,554
|
)
|
|
(117,087
|
)
|
|||
|
|
|
|
|
|
||||||
FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Net borrowings (repayments) on revolving credit facility
|
9,000
|
|
|
(17,000
|
)
|
|
34,000
|
|
|||
Term loan borrowings
|
40,000
|
|
|
60,000
|
|
|
—
|
|
|||
Dividends paid
|
(29,375
|
)
|
|
(24,432
|
)
|
|
(17,783
|
)
|
|||
Proceeds from issuance of common stock
|
10,187
|
|
|
109,168
|
|
|
86,805
|
|
|||
Equity issuance costs
|
(157
|
)
|
|
(611
|
)
|
|
(680
|
)
|
|||
Debt issuance costs
|
(326
|
)
|
|
(743
|
)
|
|
(634
|
)
|
|||
Settlement of contingent purchase price
|
—
|
|
|
(393
|
)
|
|
—
|
|
|||
Net cash provided by financing activities
|
29,329
|
|
|
125,989
|
|
|
101,708
|
|
|||
Increase (decrease) in cash and cash equivalents and restricted cash
|
$
|
262
|
|
|
$
|
562
|
|
|
$
|
(450
|
)
|
Cash and cash equivalents and restricted cash, beginning of period
|
2,130
|
|
|
1,568
|
|
|
2,018
|
|
|||
Cash and cash equivalents and restricted cash, end of period
|
$
|
2,392
|
|
|
$
|
2,130
|
|
|
$
|
1,568
|
|
|
|
|
|
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
5,564
|
|
|
$
|
3,125
|
|
|
$
|
564
|
|
Invoices accrued for construction, tenant improvement and other capitalized costs
|
$
|
71
|
|
|
$
|
209
|
|
|
$
|
28
|
|
Reclassification between accounts and notes receivable
|
$
|
861
|
|
|
$
|
615
|
|
|
$
|
—
|
|
Reclassification of registration statement costs incurred in prior year to equity issuance costs
|
$
|
147
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Conversion of mortgage note upon acquisition of real estate property
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,500
|
|
Increase in fair value of cash flow hedges
|
$
|
182
|
|
|
$
|
144
|
|
|
$
|
—
|
|
Fair value of property received in foreclosure
|
$
|
4,541
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Notes and mortgage receivable payments utilized to originate note receivable (see footnote 5)
|
$
|
18,167
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest accrued to notes receivable
|
$
|
235
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Assumption of mortgage note payable
|
$
|
5,391
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
2018
|
|
2017
|
||||
Cash and cash equivalents
|
$
|
2,007
|
|
|
$
|
2,130
|
|
Restricted cash
|
385
|
|
|
—
|
|
||
Cash and cash equivalents and restricted cash
|
$
|
2,392
|
|
|
$
|
2,130
|
|
•
|
Level 1
– quoted prices for identical instruments in active markets.
|
•
|
Level 2
– quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and
|
•
|
Level 3
– fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
•
|
the package of practical expedients that allows an entity not to reassess upon adoption (i) whether an expired or existing contract contains a lease, (ii) whether a lease classification related to expired or existing lease arrangements, and (iii) whether costs incurred on expired or existing leases qualify as initial direct costs, and
|
•
|
as a lessor, the practical expedient not to separate certain non-lease components, such as common area maintenance, from the lease component if (i) the timing and pattern of transfer are the same for the non-lease component and associated lease component, and (ii) the lease component would be classified as an operating lease if accounted for separately.
|
(Dollars in thousands)
|
Number of
Facilities
|
|
Land and
Land
Improvements
|
|
Buildings,
Improvements, and
Lease Intangibles
|
|
Personal
Property
|
|
Total
|
|
Accumulated
Depreciation
|
|||||||||||
Medical office buildings:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Florida
|
5
|
|
|
$
|
4,608
|
|
|
$
|
29,278
|
|
|
$
|
—
|
|
|
$
|
33,886
|
|
|
$
|
4,110
|
|
Ohio
|
6
|
|
|
3,638
|
|
|
26,407
|
|
|
—
|
|
|
30,045
|
|
|
5,162
|
|
|||||
Texas
|
3
|
|
|
3,115
|
|
|
15,470
|
|
|
—
|
|
|
18,585
|
|
|
4,255
|
|
|||||
Illinois
|
2
|
|
|
1,136
|
|
|
11,831
|
|
|
—
|
|
|
12,967
|
|
|
2,449
|
|
|||||
Kansas
|
3
|
|
|
2,455
|
|
|
14,931
|
|
|
—
|
|
|
17,386
|
|
|
4,045
|
|
|||||
Iowa
|
1
|
|
|
2,241
|
|
|
9,010
|
|
|
—
|
|
|
11,251
|
|
|
2,204
|
|
|||||
Other states
|
15
|
|
|
4,355
|
|
|
35,658
|
|
|
—
|
|
|
40,013
|
|
|
4,108
|
|
|||||
|
35
|
|
|
21,548
|
|
|
142,585
|
|
|
—
|
|
|
164,133
|
|
|
26,333
|
|
|||||
Physician clinics:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Kansas
|
2
|
|
|
610
|
|
|
6,921
|
|
|
—
|
|
|
7,531
|
|
|
1,382
|
|
|||||
Illinois
|
6
|
|
|
2,888
|
|
|
9,475
|
|
|
—
|
|
|
12,363
|
|
|
394
|
|
|||||
Florida
|
4
|
|
|
253
|
|
|
9,484
|
|
|
—
|
|
|
9,737
|
|
|
826
|
|
|||||
Other states
|
8
|
|
|
2,175
|
|
|
17,819
|
|
|
—
|
|
|
19,994
|
|
|
3,227
|
|
|||||
|
20
|
|
|
5,926
|
|
|
43,699
|
|
|
—
|
|
|
49,625
|
|
|
5,829
|
|
|||||
Surgical centers and hospitals
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Louisiana
|
1
|
|
|
1,683
|
|
|
21,353
|
|
|
—
|
|
|
23,036
|
|
|
1,111
|
|
|||||
Michigan
|
2
|
|
|
637
|
|
|
8,277
|
|
|
—
|
|
|
8,914
|
|
|
2,340
|
|
|||||
Illinois
|
2
|
|
|
2,349
|
|
|
8,222
|
|
|
—
|
|
|
10,571
|
|
|
1,219
|
|
|||||
Florida
|
1
|
|
|
271
|
|
|
7,057
|
|
|
—
|
|
|
7,328
|
|
|
693
|
|
|||||
Arizona
|
2
|
|
|
576
|
|
|
5,389
|
|
|
—
|
|
|
5,965
|
|
|
1,505
|
|
|||||
Other states
|
7
|
|
|
2,130
|
|
|
17,844
|
|
|
—
|
|
|
19,974
|
|
|
3,825
|
|
|||||
|
15
|
|
|
7,646
|
|
|
68,142
|
|
|
—
|
|
|
75,788
|
|
|
10,693
|
|
|||||
Specialty centers
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Illinois
|
3
|
|
|
3,482
|
|
|
24,732
|
|
|
—
|
|
|
28,214
|
|
|
1,717
|
|
|||||
Other states
|
22
|
|
|
5,170
|
|
|
38,342
|
|
|
—
|
|
|
43,512
|
|
|
6,772
|
|
|||||
|
25
|
|
|
8,652
|
|
|
63,074
|
|
|
—
|
|
|
71,726
|
|
|
8,489
|
|
|||||
Behavioral facilities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
West Virginia
|
1
|
|
|
2,138
|
|
|
22,897
|
|
|
—
|
|
|
25,035
|
|
|
734
|
|
|||||
Illinois
|
1
|
|
|
1,300
|
|
|
18,803
|
|
|
—
|
|
|
20,103
|
|
|
1,215
|
|
|||||
Indiana
|
2
|
|
|
1,126
|
|
|
6,040
|
|
|
—
|
|
|
7,166
|
|
|
312
|
|
|||||
Other states
|
3
|
|
|
1,411
|
|
|
12,836
|
|
|
—
|
|
|
14,247
|
|
|
412
|
|
|||||
|
7
|
|
|
5,975
|
|
|
60,576
|
|
|
—
|
|
|
66,551
|
|
|
2,673
|
|
|||||
Long-term acute care hospitals:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Indiana
|
1
|
|
|
523
|
|
|
14,405
|
|
|
—
|
|
|
14,928
|
|
|
1,049
|
|
|||||
|
1
|
|
|
523
|
|
|
14,405
|
|
|
—
|
|
|
14,928
|
|
|
1,049
|
|
|||||
Corporate property
|
—
|
|
|
—
|
|
|
2,046
|
|
|
133
|
|
|
2,179
|
|
|
232
|
|
|||||
Total real estate investments
|
103
|
|
|
$
|
50,270
|
|
|
$
|
394,527
|
|
|
$
|
133
|
|
|
$
|
444,930
|
|
|
$
|
55,298
|
|
2019
|
$
|
39,473
|
|
2020
|
36,587
|
|
|
2021
|
33,452
|
|
|
2022
|
29,814
|
|
|
2023
|
25,211
|
|
|
2024 and thereafter
|
133,172
|
|
|
|
$
|
297,709
|
|
|
Balance as of
|
|
|||||
(Dollars in thousands)
|
December 31, 2018
|
December 31, 2017
|
Maturity Dates
|
||||
|
|
|
|
||||
Revolving Credit Facility
|
$
|
43,000
|
|
$
|
34,000
|
|
8/19
|
5-Year Term Loan, net
|
49,759
|
|
29,685
|
|
3/22
|
||
7-Year Term Loan, net
|
49,722
|
|
29,668
|
|
3/24
|
||
Mortgage Note Payable
|
5,285
|
|
—
|
|
5/24
|
||
|
$
|
147,766
|
|
$
|
93,353
|
|
|
|
Asset Derivatives Fair Value at
|
|
Liability Derivatives Fair Value at
|
||||||||||||
(in thousands)
|
December 31, 2018
|
December 31, 2017
|
Balance Sheet Classification
|
|
December 31, 2018
|
December 31, 2017
|
Balance Sheet Classification
|
||||||||
Interest rate swaps
|
$
|
902
|
|
$
|
258
|
|
Other assets
|
|
$
|
98
|
|
$
|
—
|
|
Other Liabilities
|
|
|
For the Year Ended December 31,
|
|||||
(Dollars in thousands)
|
|
2018
|
2017
|
||||
Amount of unrealized gain (loss) recognized in OCI on derivative
|
|
$
|
182
|
|
$
|
(144
|
)
|
Amount of loss reclassified from accumulated OCI into interest expense
|
|
$
|
193
|
|
$
|
402
|
|
Total Interest Expense presented in the Consolidated Statements of Income in which the effects of the cash flow hedges are recorded
|
|
$
|
6,299
|
|
$
|
3,948
|
|
|
For the Year Ended December 31,
|
|||||
|
2018
|
2017
|
2016
|
|||
Balance, beginning of period
|
18,085,798
|
|
12,988,482
|
|
7,596,940
|
|
Issuance of common stock
|
334,700
|
|
4,887,500
|
|
5,175,000
|
|
Restricted stock issued
|
214,004
|
|
209,816
|
|
216,542
|
|
Balance, end of period
|
18,634,502
|
|
18,085,798
|
|
12,988,482
|
|
Declaration Date
|
Record Date
|
Date Paid
|
Amount Per Share
|
February 1, 2018
|
February 16, 2018
|
March 2, 2018
|
$0.3975
|
May 3, 2018
|
May 18, 2018
|
June 1, 2018
|
$0.4000
|
August 1, 2018
|
August 17, 2018
|
August 31, 2018
|
$0.4025
|
November 1, 2018
|
November 16, 2018
|
November 30, 2018
|
$0.4050
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
(Dollars in thousands, except per share data)
|
|
|
|
|
|
||||||
Net income
|
$
|
4,403
|
|
|
$
|
3,510
|
|
|
$
|
2,721
|
|
Participating securities' share in earnings
|
(1,061
|
)
|
|
$
|
(731
|
)
|
|
$
|
—
|
|
|
Net income, less participating securities' share in earnings
|
$
|
3,342
|
|
|
$
|
2,779
|
|
|
$
|
2,721
|
|
|
|
|
|
|
|
||||||
Weighted Average Common Shares Outstanding
|
|
|
|
|
|
||||||
Weighted average common shares outstanding
|
18,311,177
|
|
|
15,268,612
|
|
|
11,478,883
|
|
|||
Unvested restricted shares
|
(642,481
|
)
|
|
(453,354
|
)
|
|
(240,446
|
)
|
|||
Weighted average common shares outstanding–Basic
|
17,668,696
|
|
|
14,815,258
|
|
|
11,238,437
|
|
|||
Weighted average common shares–Basic
|
17,668,696
|
|
|
14,815,258
|
|
|
11,238,437
|
|
|||
Dilutive potential common shares
|
—
|
|
|
—
|
|
|
81,068
|
|
|||
Weighted average common shares outstanding –Diluted
|
17,668,696
|
|
|
14,815,258
|
|
|
11,319,505
|
|
|||
|
|
|
|
|
|
||||||
Basic Income per Common Share
|
$
|
0.19
|
|
|
$
|
0.19
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
||||||
Diluted Income per Common Share
|
$
|
0.19
|
|
|
$
|
0.19
|
|
|
$
|
0.24
|
|
|
|
Year Ended December 31,
|
||||||||
(dollars in thousands, except per share amounts)
|
2018
|
2017
|
2016
|
|||||||
Stock-based awards, beginning of year
|
512,115
|
|
302,299
|
|
85,757
|
|
||||
|
Stock in lieu of compensation
|
69,767
|
|
80,580
|
|
104,112
|
|
|||
|
Stock awards
|
144,237
|
|
129,236
|
|
112,430
|
|
|||
|
Total Granted
|
214,004
|
|
209,816
|
|
216,542
|
|
|||
|
Vested
|
(16,632
|
)
|
—
|
|
—
|
|
|||
Stock-based awards, end of year
|
709,487
|
|
512,115
|
|
302,299
|
|
||||
Weighted average grant date fair value, per share, of:
|
|
|
|
|||||||
|
Stock-based awards, beginning of year
|
$
|
21.20
|
|
$
|
19.36
|
|
$
|
19.65
|
|
|
Stock-based awards granted during the year
|
$
|
28.70
|
|
$
|
23.84
|
|
$
|
19.25
|
|
|
Stock-based awards vested during the year
|
$
|
19.65
|
|
$
|
—
|
|
$
|
—
|
|
|
Stock-based awards, end of year
|
$
|
23.50
|
|
$
|
21.20
|
|
$
|
19.36
|
|
Grant date fair value of shares granted during the year
|
$
|
6,142
|
|
$
|
5,002
|
|
$
|
4,168
|
|
|
December 31,
|
|||||
(Dollars in thousands)
|
2018
|
2017
|
||||
Notes receivable
|
$
|
24,110
|
|
$
|
13,917
|
|
Accounts and interest receivable
|
2,428
|
|
2,417
|
|
||
Straight-line rent receivables
|
3,254
|
|
2,179
|
|
||
Allowance for doubtful accounts
|
(270
|
)
|
(293
|
)
|
||
Prepaid assets
|
487
|
|
341
|
|
||
Deferred financing costs, net
|
318
|
|
618
|
|
||
Leasing commissions, net
|
790
|
|
483
|
|
||
Deferred tax asset
|
2,024
|
|
478
|
|
||
Fair value of interest rate swaps
|
902
|
|
258
|
|
||
Above-market lease intangible assets, net
|
168
|
|
—
|
|
||
Other
|
335
|
|
255
|
|
||
|
$
|
34,546
|
|
$
|
20,653
|
|
◦
|
approximately one and a half monthly rental payments in cash, reimbursement of expenses and late fees totaling approximately $
0.3 million
; and
|
◦
|
approximately four months of interest payments and late fees totaling approximately
$0.2 million
.
|
•
|
On April 25, 2018, the Company provided a
$23.0 million
loan to a newly formed company (Newco),
|
Classification
|
Carrying Amount
(in millions)
|
Maximum Exposure to Loss
(in millions)
|
||||
Notes receivable
|
$
|
23.2
|
|
$
|
23.2
|
|
Notes receivable
|
$
|
0.9
|
|
$
|
0.9
|
|
|
Gross Balance at
December 31,
|
Accumulated Amortization at December 31,
|
Weighted
Average
|
|
||||||||||
(Dollars in thousands)
|
2018
|
2017
|
2018
|
2017
|
Remaining
Life (Years)
|
Balance Sheet Classification
|
||||||||
Deferred financing costs-Revolving Credit Facility
|
$
|
1,726
|
|
$
|
1,508
|
|
$
|
1,408
|
|
$
|
890
|
|
0.7
|
Other assets
|
Deferred financing costs-Term Loans
|
743
|
|
743
|
|
224
|
|
96
|
|
4.3
|
Debt, net
|
||||
Deferred financing costs-Mortgage Note Payable
|
108
|
|
—
|
|
2
|
|
—
|
|
5.3
|
Debt, net
|
||||
Above-market lease intangibles
|
262
|
|
91
|
|
94
|
|
91
|
|
7.0
|
Other assets
|
||||
Below-market lease intangibles
|
(1,331
|
)
|
(1,280
|
)
|
(493
|
)
|
(329
|
)
|
5.2
|
Other liabilities
|
||||
At-market lease intangibles
|
60,740
|
|
51,870
|
|
31,937
|
|
22,517
|
|
4.9
|
Real estate properties
|
||||
|
$
|
62,248
|
|
$
|
52,932
|
|
$
|
33,172
|
|
$
|
23,265
|
|
4.9
|
|
(in thousands)
|
Amortization, net
|
||
2019
|
$
|
8,834
|
|
2020
|
6,489
|
|
|
2021
|
4,909
|
|
|
2022
|
3,431
|
|
|
2023
|
2,164
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||
(Dollars in thousands)
|
Carrying Value
|
Fair Value
|
|
Carrying Value
|
Fair Value
|
||||||||
Mortgage note receivable
|
$
|
—
|
|
$
|
—
|
|
|
$
|
10,633
|
|
$
|
10,633
|
|
Notes receivable
|
$
|
24,110
|
|
$
|
23,936
|
|
|
$
|
13,917
|
|
$
|
13,828
|
|
Interest rate swap asset
|
$
|
902
|
|
$
|
902
|
|
|
$
|
258
|
|
$
|
258
|
|
Interest rate swap liability
|
$
|
269
|
|
$
|
269
|
|
|
$
|
—
|
|
$
|
—
|
|
Mortgage note payable
|
$
|
5,391
|
|
$
|
5,307
|
|
|
$
|
—
|
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||||
(Dollars in thousands)
|
2018
|
2017
|
2016
|
||||||
Current
|
$
|
64
|
|
$
|
171
|
|
$
|
21
|
|
Deferred
|
(1,547
|
)
|
(478
|
)
|
(10
|
)
|
|||
Total
|
$
|
(1,483
|
)
|
$
|
(307
|
)
|
$
|
11
|
|
Income tax payments, net of refunds
|
$
|
166
|
|
$
|
37
|
|
$
|
—
|
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
2018
|
|
2017
|
|||||
Deferred tax assets (liabilities):
|
|
|
|
|||||
|
Net operating losses
|
$
|
201
|
|
|
$
|
10
|
|
|
Impairment of note receivable
|
1,321
|
|
|
—
|
|
||
|
Deferred compensation
|
1,060
|
|
|
457
|
|
||
|
Other, net
|
(557
|
)
|
|
11
|
|
||
Total net deferred tax assets
|
$
|
2,025
|
|
|
$
|
478
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
|
|
Per Share
|
%
|
|
Per Share
|
%
|
|
Per Share
|
%
|
|||||||||
Common stock:
|
|
|
|
|
|
|
|
|
||||||||||
|
Ordinary income
|
$
|
0.989
|
|
61.6
|
%
|
|
$
|
0.914
|
|
58.4
|
%
|
|
$
|
1.036
|
|
68.0
|
%
|
|
Return of capital
|
0.605
|
|
37.7
|
%
|
|
0.651
|
|
41.6
|
%
|
|
0.489
|
|
32.0
|
%
|
|||
|
Capital gain
|
0.011
|
|
0.7
|
%
|
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|||
Common stock distributions
|
$
|
1.605
|
|
100.0
|
%
|
|
$
|
1.565
|
|
100.0
|
%
|
|
$
|
1.525
|
|
100.0
|
%
|
|
Quarter Ended
|
|||||||||||
(Dollars in thousands, except per share data)
|
March 31
|
June 30
|
September 30
|
December 31
|
||||||||
2018
|
|
|
|
|
||||||||
Revenues
|
$
|
11,429
|
|
$
|
12,402
|
|
$
|
12,605
|
|
$
|
12,194
|
|
Expenses
|
8,473
|
|
8,640
|
|
9,015
|
|
9,062
|
|
||||
Other non-operating
(1)
|
(1,084
|
)
|
(1,345
|
)
|
(1,591
|
)
|
(5,017
|
)
|
||||
Net income (loss)
|
$
|
1,872
|
|
$
|
2,417
|
|
$
|
1,999
|
|
$
|
(1,885
|
)
|
Net income (loss) per basic common share
|
$
|
0.09
|
|
$
|
0.12
|
|
$
|
0.10
|
|
$
|
(0.12
|
)
|
Net income (loss) per diluted common share
|
$
|
0.09
|
|
$
|
0.12
|
|
$
|
0.10
|
|
$
|
(0.12
|
)
|
|
Quarter Ended
|
|||||||||||
(Dollars in thousands, except per share data)
|
March 31
|
June 30
|
September 30
|
December 31
|
||||||||
2017
|
|
|
|
|
||||||||
Revenues
|
$
|
8,007
|
|
$
|
8,930
|
|
$
|
9,444
|
|
$
|
10,962
|
|
Expenses
(2)
|
6,499
|
|
7,256
|
|
7,838
|
|
8,841
|
|
||||
Other non-operating
|
(595
|
)
|
(1,208
|
)
|
(1,027
|
)
|
(569
|
)
|
||||
Net income
|
$
|
913
|
|
$
|
466
|
|
$
|
579
|
|
$
|
1,552
|
|
Net income per basic common share
|
$
|
0.07
|
|
$
|
0.04
|
|
$
|
0.02
|
|
$
|
0.08
|
|
Net income per diluted common share
|
$
|
0.07
|
|
$
|
0.04
|
|
$
|
0.02
|
|
$
|
0.08
|
|
__________
|
|
|
|
|
||||||||
(1) Other non-operating for the quarter ended December 31, 2018 includes an impairment charge on a note receivable for $5.0 million and a related income tax benefit of $1.3 million.
|
||||||||||||
(2)
Expenses include approximately $0.8 million related to the acquisition of 14 properties accounted for as business combinations.
|
(a) Financial Statements:
|
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets at December 31, 2018 and 2017
|
|
Consolidated Statements of Income for the years ended December 31, 2018, 2017 and 2016
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2018, 2017 and 2016
|
|
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2018, 2017 and 2016
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016
|
|
Notes to the Consolidated Financial Statements
|
|
|
|
(b) Financial Statement Schedules:
|
|
Schedule II - Valuation and Qualifying Accounts for the years ended December 31, 2018, 2017 and 2016
|
|
Schedule III - Real Estate and Accumulated Depreciation as of December 31, 2018
|
|
Schedule IV - Mortgage Loans on Real Estate as of December 31, 2018
|
Exhibit
Number
|
Description
|
||
1.1
|
|||
3.1
|
|||
3.2
|
|||
4.1
|
|||
10.1
|
|||
10.2
|
|||
10.3 †
|
Community Healthcare Trust Incorporated 2014 Incentive Plan, as amended(7)
|
||
10.4 †
|
|||
10.5 †
|
|||
10.6 †
|
|||
10.7 †
|
|||
10.8 †
|
|||
10.9 †
|
|||
10.10 †
|
|||
10.11 †
|
10.12 †
|
|||
10.13 †
|
|||
10.14 †
|
|||
10.15 †
|
|||
10.16 †
|
|||
10.17 †
|
|||
10.18
|
|||
10.19
|
|||
10.20
|
|||
10.21
|
|||
10.22
|
|||
21 *
|
|||
23 *
|
|||
31.1 *
|
|||
31.2 *
|
|||
32.1 **
|
|||
101.INS *
|
XBRL Instance Document
|
||
101.SCH *
|
XBRL Taxonomy Extension Schema Document
|
||
101.CAL *
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
||
101.LAB *
|
XBRL Taxonomy Extension Labels Linkbase Document
|
||
101.DEF *
|
XBRL Taxonomy Extension Definition Linkbase Document
|
||
101.PRE *
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
||
|
|
(1)
|
Filed as Exhibit 1.1 to the Form 8-K of the Company filed with the Securities and Exchange Commission on July 26, 2017 (File No. 001-37401) and incorporated herein by reference.
|
(2)
|
Filed as Exhibit 3.1 to Amendment No. 2 to the Registration Statement on Form S-11 of the Company filed with the Securities and Exchange Commission on May 6, 2015 (Registration No. 333-203210)
and incorporated herein by reference.
|
(3)
|
Filed as Exhibit 3.2 to the Registration Statement on Form S-11 of the Company filed with the Securities and Exchange Commission on April 2, 2015 (Registration No. 333-203210)
and incorporated herein by reference.
|
(4)
|
Filed as Exhibit 4.1 to the Registration Statement on Form S-11 of the Company filed with the Securities and Exchange Commission on April 2, 2015 (Registration No. 333-203210)
and incorporated herein by reference.
|
(5)
|
Filed as Exhibit 10.1 to Amendment No. 1 to the Registration Statement on Form S-11 of the Company filed with the Securities and Exchange Commission on April 28, 2015 (Registration No. 333-203210)
and incorporated herein by reference.
|
(6)
|
Filed as Exhibit 10.2 to the Registration Statement on Form S-11 of the Company filed with the Securities and Exchange Commission on April 2, 2015 (Registration No. 333-203210)
and incorporated herein by reference.
|
(7)
|
The
2014 Incentive Plan
filed as Exhibit 10.3 to the Registration Statement on Form S-11 of the Company filed with the Securities and Exchange Commission on April 2, 2015 (Registration No. 333-203210), and, as to
Amendment No. 1 to the 2014 Incentive Plan
, as Exhibit 10.12 to Amendment No. 2 to the Registration Statement on Form S-11 of the Company
|
(8)
|
Filed as Exhibit 4.5 to the Registration Statement on Form S-8 of the Company filed with the Securities and Exchange Commission on December 7, 2016 (Registration Statement No. 333-214951) and incorporated herein by reference.
|
(9)
|
Filed as Exhibit 10.2 to the Form 8-K of the Company filed with the Securities and Exchange Commission on November 4, 2016 (File No. 001-37401) and incorporated herein by reference.
|
(10)
|
Filed as Exhibit 10.6 to the Registration Statement on Form S-11 of the Company filed with the Securities and Exchange Commission on April 2, 2015 (Registration No. 333-203210)
and incorporated herein by reference.
|
(11)
|
Filed as Exhibit 10.1 to the Form 8-K of the Company filed with the Securities and Exchange Commission on January 18, 2017 (File No. 001-37401) and incorporated herein by reference.
|
(12)
|
Filed as Exhibit 10.1 to the Form 8-K of the Company filed with the Securities and Exchange Commission on January 2, 2018 (File No. 001-37401) and incorporated herein by reference.
|
(13)
|
Filed as Exhibit 10.1 to the Form 8-K of the Company filed with the Securities and Exchange Commission on January 3, 2019 (File No. 001-37401) and incorporated herein by reference.
|
(14)
|
Filed as Exhibit 10.7 to the Registration Statement on Form S-11 of the Company filed with the Securities and Exchange Commission on April 2, 2015 (Registration No. 333-203210)
and incorporated herein by reference.
|
(15)
|
Filed as Exhibit 10.2 to the Form 8-K of the Company filed with the Securities and Exchange Commission on January 18, 2017 (File No. 001-37401) and incorporated herein by reference.
|
(16)
|
Filed as Exhibit 10.2 to the Form 8-K of the Company filed with the Securities and Exchange Commission on January 2, 2018 (File No. 001-37401) and incorporated herein by reference.
|
(17)
|
Filed as Exhibit 10.2 to the Form 8-K of the Company filed with the Securities and Exchange Commission on January 3, 2019 (File No. 001-37401) and incorporated herein by reference.
|
(18)
|
Filed as Exhibit 10.8 to the Registration Statement on Form S-11 of the Company filed with the Securities and Exchange Commission on April 2, 2015 (Registration No. 333-203210)
and incorporated herein by reference.
|
(19)
|
Filed as Exhibit 10.3 to the Form 8-K of the Company filed with the Securities and Exchange Commission on January 18, 2017 (File No. 001-37401) and incorporated herein by reference.
|
(20)
|
Filed as Exhibit 10.3 to the Form 8-K of the Company filed with the Securities and Exchange Commission on January 3, 2019 (File No. 001-37401) and incorporated herein by reference.
|
(21)
|
Filed as Exhibit 10.3 to the Form 8-K of the Company filed with the Securities and Exchange Commission on January 2, 2018 (File No. 001-37401) and incorporated herein by reference.
|
(22)
|
Filed as Exhibit 10.9 to Amendment No. 1 to the Registration Statement on Form S-11 of the Company filed with the Securities and Exchange Commission on April 28, 2015 (Registration No. 333-203210)
and incorporated herein by reference.
|
(23)
|
Filed as Exhibit 10.10 to Amendment No. 1 to the Registration Statement on Form S-11 of the Company filed with the Securities and Exchange Commission on April 28, 2015 (Registration No. 333-203210)
and incorporated herein by reference.
|
(24)
|
Filed as Exhibit 10.11 to Amendment No. 1 to the Registration Statement on Form S-11 of the Company filed with the Securities and Exchange Commission on April 28, 2015 (Registration No. 333-203210)
and incorporated herein by reference.
|
(25)
|
Filed as Exhibit 10.1 to the Form 10-Q of the Company filed with the Securities and Exchange Commission on May 9, 2017 (File No. 001-37401) and incorporated herein by reference, and, as to the First Amendment to the Second Amended and Restated Credit Agreement dated February 15, 2019, filed as Exhibit 10.1 to the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 8, 2018 (File No. 001-37401), and, as to the Second Amendment to the Second Amended and Restated Credit Agreement dated March 27, 2018, filed as Exhibit 99.1 to the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 8, 2018 (File No. 001-37401), each of which is incorporated herein by reference.
|
(26)
|
Filed as Exhibit 10.1 to the Form 8-K of the Company filed with the Securities and Exchange Commission on August 7, 2018 (File No. 001-37401) and incorporated herein by reference.
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
†
|
Denotes executive compensation plan or arrangement.
|
|
COMMUNITY HEALTHCARE TRUST INCORPORATED
|
|
|
|
|
|
By:
|
/s/ Timothy G. Wallace
|
|
|
Timothy G. Wallace
|
|
|
Chairman of the Board and Chief Executive Officer and President
|
Signature
|
Title
|
Date
|
|
|
|
/s/ Timothy G. Wallace
|
Chairman of the Board and Chief Executive
|
February 26, 2019
|
Timothy G. Wallace
|
Officer and President (Principal Executive Officer)
|
|
|
|
|
/s/ W. Page Barnes
|
Executive Vice President and Chief Financial
|
February 26, 2019
|
W. Page Barnes
|
Officer (Principal Financial Officer)
|
|
|
|
|
/s/ Leigh Ann Stach
|
Vice President of Financial Reporting and Chief Accounting
|
February 26, 2019
|
Leigh Ann Stach
|
Officer (Principal Accounting Officer)
|
|
|
|
|
/s/ Alan Gardner
|
Director
|
February 26, 2019
|
Alan Gardner
|
|
|
|
|
|
/s/ Robert Hensley
|
Director
|
February 26, 2019
|
Robert Hensley
|
|
|
|
|
|
/s/ Claire Gulmi
|
Director
|
February 26, 2019
|
Claire Gulmi
|
|
|
|
|
|
/s/ R. Lawrence Van Horn
|
Director
|
February 26, 2019
|
Lawrence Van Horn
|
|
|
|
|
|
Additions
|
|
|
|||||||||||
Description
|
Balance at
Beginning of
Period
|
Charged to
Costs and
Expenses
|
Charged to
Other
Accounts
|
Uncollectible
Accounts
Written-off
|
Balance at
End of
Period
|
|||||||||||
2018
|
Accounts receivable allowance
|
$
|
293
|
|
$
|
73
|
|
$
|
—
|
|
$
|
(96
|
)
|
$
|
270
|
|
2017
|
Accounts receivable allowance
|
$
|
154
|
|
$
|
67
|
|
$
|
151
|
|
$
|
(79
|
)
|
$
|
293
|
|
2016
|
Accounts receivable allowance
|
$
|
71
|
|
$
|
155
|
|
$
|
—
|
|
$
|
(72
|
)
|
$
|
154
|
|
|
|
Year Ended
December 31, 2018
|
Year Ended
December 31, 2017
|
Year Ended
December 31, 2016
|
|||||||||||||||
(Dollars in thousands)
|
Total Property
|
Accumulated
Depreciation
|
Total Property
|
Accumulated
Depreciation
|
Total Property
|
Accumulated
Depreciation
|
|||||||||||||
Beginning Balance
|
$
|
388,486
|
|
$
|
36,136
|
|
$
|
252,736
|
|
$
|
18,404
|
|
$
|
132,967
|
|
$
|
5,203
|
|
|
Additions during the period:
|
|
|
|
|
|
|
|||||||||||||
|
Acquisitions
|
55,083
|
|
1,212
|
|
134,618
|
|
17,467
|
|
118,190
|
|
13,091
|
|
||||||
|
Other improvements
|
4,557
|
|
18,424
|
|
1,132
|
|
265
|
|
1,579
|
|
110
|
|
||||||
Retirements/dispositions:
|
|
|
|
|
|
|
|||||||||||||
|
Real estate
|
(3,196
|
)
|
(474
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Ending Balance
|
$
|
444,930
|
|
$
|
55,298
|
|
$
|
388,486
|
|
$
|
36,136
|
|
$
|
252,736
|
|
$
|
18,404
|
|
Description of Collateral
|
Interest
Rate
|
Maturity
Date
|
Periodic
Payment
Terms
|
Original
Face
Amount
|
Carrying
Amount
|
Principal amount of loans subject to delinquent principal or interest
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
$
|
—
|
|
|
Total Mortgage Loans
|
|
|
|
|
$
|
—
|
|
|
|
|
Year Ended December 31,
|
||||||||
|
|
2018
|
2017
|
2016
|
||||||
Balance at beginning of period
|
$
|
10,633
|
|
$
|
10,786
|
|
$
|
10,897
|
|
|
Additions during the period:
|
|
|
|
|||||||
|
New or acquired mortgages, net
|
—
|
|
—
|
|
12,406
|
|
|||
|
Amortization/write-off of loan and commitment fees
|
—
|
|
122
|
|
75
|
|
|||
|
|
—
|
|
122
|
|
12,481
|
|
|||
Deductions during the period:
|
|
|
|
|||||||
|
Conversion upon acquisition
(a)
|
—
|
|
—
|
|
(12,500
|
)
|
|||
|
Repayment upon settlement of bankruptcy
(b)
|
(10,633
|
)
|
—
|
|
—
|
|
|||
|
Scheduled principal payments
|
—
|
|
(275
|
)
|
(92
|
)
|
|||
|
|
(10,633
|
)
|
(275
|
)
|
(12,592
|
)
|
|||
Balance at end of period
(b)
|
$
|
—
|
|
$
|
10,633
|
|
$
|
10,786
|
|
Subsidiary
|
State of Incorporation
|
|
|
Community Healthcare OP, LP
|
Delaware
|
Community Healthcare Trust, LLC
|
Delaware
|
Community Healthcare Trust Services, Inc.
|
Tennessee
|
CHCT Alabama, LLC
|
Delaware
|
CHCT Arizona, LLC
|
Delaware
|
CHCT California, LLC
|
Delaware
|
CHCT Colorado, LLC
|
Delaware
|
CHCT Connecticut, LLC
|
Delaware
|
CHCT Connecticut II, LLC
|
Delaware
|
CHCT Florida, LLC
|
Delaware
|
CHCT Georgia, LLC
|
Delaware
|
CHCT Idaho, LLC
|
Delaware
|
CHCT Illinois, LLC
|
Delaware
|
CHCT Indiana, LLC
|
Delaware
|
CHCT Iowa, LLC
|
Delaware
|
CHCT Kansas, LLC
|
Delaware
|
CHCT Kentucky, LLC
|
Delaware
|
CHCT Lending, LLC
|
Delaware
|
CHCT Louisiana, LLC
|
Delaware
|
CHCT Maryland, LLC
|
Delaware
|
CHCT Massachusetts, LLC
|
Delaware
|
CHCT Michigan, LLC
|
Delaware
|
CHCT Mississippi, LLC
|
Delaware
|
CHCT Nevada, LLC
|
Delaware
|
CHCT New Jersey, LLC
|
Delaware
|
CHCT New York, LLC
|
Delaware
|
CHCT North Carolina, LLC
|
Delaware
|
CHCT Ohio, LLC
|
Delaware
|
CHCT Oklahoma, LLC
|
Delaware
|
CHCT Pennsylvania, LLC
|
Delaware
|
CHCT South Carolina, LLC
|
Delaware
|
CHCT Tennessee, LLC
|
Delaware
|
CHCT Texas, LLC
|
Delaware
|
CHCT Virginia, LLC
|
Delaware
|
CHCT West Virginia, LLC
|
Delaware
|
CHCT Wisconsin, LLC
|
Delaware
|
1.
|
I have reviewed this Annual Report on Form 10-K of Community Healthcare Trust Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Timothy G. Wallace
|
|
Timothy G. Wallace
|
|
Chief Executive Officer and President
|
1.
|
I have reviewed this Annual Report on Form 10-K of Community Healthcare Trust Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ W. Page Barnes
|
|
W. Page Barnes
|
|
Executive Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Timothy G. Wallace
|
|
Timothy G. Wallace
|
|
Chief Executive Officer and President
|
|
|
|
/s/ W. Page Barnes
|
|
W. Page Barnes
|
|
Executive Vice President and Chief Financial Officer
|