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Merger with HTA (Tables)

3 Months Ended

Mar. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Consideration Transferred

The implied consideration transferred on the Closing Date is as follows:

Dollars in thousands, except for per share data
Shares of Legacy HTA Common Stock outstanding as of July 20, 2022 as adjusted(a)			228,520,990
Exchange ratio			1.00
Implied shares of Legacy HR Common Stock issued			228,520,990
Adjusted closing price of Legacy HR Common Stock on July 20, 2022(b)			$	24.37
Value of implied Legacy HR Common Stock issued			$	5,569,057
Fair value of Legacy HTA restricted stock awards attributable to pre-Merger services(c)			7,406
Consideration transferred			$	5,576,463

(a) The number of shares of Legacy HTA Common Stock presented above was based on 228,857,717 total shares of Legacy HTA Common Stock outstanding as of the Closing Date, less 192 HTA fractional shares that were cancelled in lieu of cash and less 336,535 shares of Legacy HTA restricted stock (net of 215,764 shares of Legacy HTA restricted stock withheld). For accounting purposes, these shares were converted to Legacy HR Common Stock, at an exchange ratio of 1.00 share of Legacy HR Common Stock per share of Legacy HTA Common Stock.

(b) For accounting purposes, the fair value of Legacy HR Common Stock issued to former holders of Legacy HTA Common Stock was based on the per share closing price of Legacy HR Common Stock on July 20, 2022.

(c) Represents the fair value of Legacy HTA restricted shares which fully vested prior to the closing of the Merger or became fully vested as a result of the closing of the Merger and which are attributable to pre-combination services.

Schedule of Fair Values of the Assets Acquired And Liabilities Assumed

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the Closing Date:

Dollars in thousands			PRELIMINARY AMOUNTS RECOGNIZED ON THE CLOSING DATE			MEASUREMENT PERIOD ADJUSTMENTS			PRELIMINARY AMOUNTS RECOGNIZED ON THE CLOSING DATE (as adjusted)
ASSETS
Real estate investments
Land			$	985,926		$	6,285		$	992,211
Buildings and improvements			6,960,418			(121,413)			6,839,005
Lease intangible assets(a)			831,920			1,847			833,767
Financing lease right-of-use assets			9,874			3,146			13,020
Construction in progress			10,071			(6,744)			3,327
Land held for development			46,538			—			46,538
Total real estate investments			$	8,844,747		$	(116,879)		$	8,727,868
Assets held for sale, net			707,442			(7,946)			699,496
Investments in unconsolidated joint ventures			67,892			—			67,892
Cash and cash equivalents			26,034			11,403			37,437
Restricted cash			1,123,647			(1,247)			1,122,400
Operating lease right-of-use assets			198,261			17,786			216,047
Other assets, net (b) (c)			209,163			(3,840)			205,323
Total assets acquired			$	11,177,186		$	(100,723)		$	11,076,463
LIABILITIES
Notes and bonds payable			$	3,991,300		$	—		$	3,991,300
Accounts payable and accrued liabilities			1,227,570			17,374			1,244,944
Liabilities of assets held for sale			28,677			(3,939)			24,738
Operating lease liabilities			173,948			10,173			184,121
Financing lease liabilities			10,720			(855)			9,865
Other liabilities			203,210			(11,544)			191,666
Total liabilities assumed			$	5,635,425		$	11,209		$	5,646,634
Net identifiable assets acquired			$	5,541,761		$	(111,932)		$	5,429,829
Non-controlling interest			$	110,702		$	—		$	110,702
Goodwill			$	145,404		$	111,932		$	257,336
(a) The weighted average amortization period for the acquired lease intangible assets is approximately 6 years.
(b) Includes $15.9 million of contractual accounts receivable, which approximates fair value.
(c) Includes $78.7 million of gross contractual real estate notes receivable, the fair value of which was $74.8 million, and the Company preliminarily expects to collect substantially all of the real estate notes receivable proceeds as of the Closing Date.

The cumulative measurement period adjustments recorded through March 31, 2023 primarily resulted from updated valuations related to the Company’s real estate assets and liabilities and additional information obtained by the Company related to the properties acquired in the Merger and their respective tenants, and resulted in an increase to goodwill of $111.9 million.

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- Definition

Tabular disclosure of contingent consideration in asset acquisition.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 50
-Section 15
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=6911878&loc=d3e8732-128492

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- Definition

Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4845-128472

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