Healthcare Realty Trust (HR) risk factors, FY2025 10-K

Risks relating to our business and operations

1. 01The Company's expected results may not be achieved43% rewritten
2. 02rates and operational requirements; unanticipated difficulties and/or expenditures relating to future acquisitions and developments; changes in rules or practices governing the Company's financial reporting; and other financial, legal and operational mattersNew
3. 03The Company’s revenues depend on the ability of its tenants under its leases to generate sufficient income from their operations to make rental payments to the Company
4. 04The Company's results of operations have been and will continue to be impacted negatively by the Prospect Medical bankruptcy94% rewritten
5. 05Owning real estate and indirect interests in real estate is subject to inherent risks
6. 06The Company may incur impairment charges on its real estate properties or other assets30% rewritten
7. 07The Company has properties subject to purchase options that expose it to reinvestment risk and reduction in expected investment returns36% rewritten
8. 08For more specific information concerning the Company’s purchase options, see “Purchase Options” in the “Trends and Matters Impacting Operating Results” as a part of Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations included in Part II of this report
9. 09Certain of the Company’s properties are special purpose healthcare facilities and may not be easily adaptable to other uses
10. 10The Company has, and in the future may have more exposure to fixed rent escalators, which could lag behind inflation and the growth in operating expenses such as real estate taxes, utilities, insurance, and maintenance expense21% rewritten
11. 11The Company’s real estate investments are illiquid and the Company may not be able to sell properties strategically targeted for disposition
12. 12The Company is subject to risks associated with the development and redevelopment of properties
13. 13The Company may make material acquisitions and undertake developments and redevelopments that may involve the expenditure of significant funds and may not perform in accordance with management’s expectations
14. 14The Company is exposed to risks associated with geographic concentration47% rewritten
15. 15Many of the Company’s leases are dependent on the viability of associated health systems. Revenue concentrations relating to these leases expose the Company to risks related to the financial condition of the associated health systems
16. 16Many of the Company’s properties are held under ground leases. These ground leases contain provisions that may limit the Company’s ability to lease, sell, or finance these properties
17. 17The Company may experience uninsured or underinsured losses
18. 18Damage from catastrophic weather and other natural events, whether caused by climate change or otherwise, could result in losses to the Company
19. 19The Company faces risks associated with security breaches through cyber attacks, cyber intrusions, or otherwise, as well as other significant disruptions of its information technology networks and related systems
20. 20The Company has structured and may in the future structure acquisitions of property in exchange for limited partnership units of the OP on terms that could limit its liquidity or flexibility
21. 21Healthcare Realty Trust is a holding company with no direct operations and, as such, it relies on funds received from the OP to pay liabilities, and the interests of its stockholders will be structurally subordinated to all liabilities and obligations of the OP and its subsidiaries
22. 22The Company cannot assure you that it will be able to continue paying dividends at or above the rates previously paid
23. 23Pandemics and measures intended to prevent their spread or mitigate their severity could have a material adverse effect on the Company's business, results of operations, cash flows and financial condition34% rewritten
24. 24The Company's success depends, in part, on its ability to attract and retain talented employees. The loss of any one of the Company's key personnel or the inability to maintain appropriate staffing could adversely impact the Company's business46% rewritten

Risks relating to our capital structure and financings

1. 25The Company has incurred significant debt obligations and may incur additional debt and increase leverage in the future
2. 26Covenants in the Company’s debt instruments limit its operational flexibility, and a breach of these covenants could materially affect the Company’s consolidated financial condition and results of operations
3. 27If lenders under the Unsecured Credit Facility fail to meet their funding commitments, the Company’s operations and consolidated financial position would be negatively impacted
4. 28Increases in interest rates could have a material adverse effect on the Company's cost of capital
5. 29The Company's swap agreements may not effectively reduce its exposure to changes in interest rates
6. 30The Company has entered into joint venture agreements that limit its flexibility with respect to jointly owned properties and expects to enter into additional such agreements in the future23% rewritten
7. 31The U.S. federal income tax treatment of the cash that the Company might receive from cash settlement of a forward equity agreement is unclear and could jeopardize the Company's ability to meet the REIT qualification requirements
8. 32In the event of our bankruptcy or insolvency, any forward equity agreements will automatically terminate, and the Company would not receive the expected proceeds from any forward sale of shares of its common stock

Risks relating to government regulations

1. 33The Company's property taxes could increase due to reassessment or property tax rate changes45% rewritten
2. 34Trends in the healthcare service industry, including the impact of the One Big Beautiful Bill Act passed during 2025 that is subject of ongoing analysis, may negatively affect the demand for the Company’s properties, lease revenues and the values of its investments
3. 35The costs of complying with governmental laws and regulations may adversely affect the Company's results of operations
4. 36Qualifying as a REIT involves highly technical and complex provisions of the Internal Revenue Code
5. 37If the Company fails to remain qualified as a REIT, the Company will be subject to significant adverse consequences, including adversely affecting the value of its common stock
6. 38The Company’s articles of incorporation, as well as provisions of the MGCL, contain limits and restrictions on transferability of the Company’s common stock which may have adverse effects on the value of the Company’s common stock
7. 39Complying with the REIT requirements may cause the Company to forego otherwise attractive opportunities
8. 40The prohibited transactions tax may limit the Company's ability to sell properties
9. 41New legislation or administrative or judicial action, in each instance potentially with retroactive effect, could make it more difficult or impossible for the Company to qualify as a REIT
10. 42New and increased transfer tax rates may reduce the value of the Company’s properties