Financial Performance and Stability - The company has experienced net losses in the past and may continue to do so in the future, primarily due to depreciation, interest expenses, and general administrative costs[107]. - The financial stability of tenants is crucial for the company's revenue, and lease defaults could significantly impact distributions to stockholders[106]. - Economic downturns could lead to tenant defaults, reduced occupancy rates, and lower property values, adversely affecting financial results[114]. - The company may incur additional costs in re-leasing specialized properties if tenants default or terminate leases, which could materially affect its financials[120]. - Inflationary pressures are expected to increase general and administrative expenses, including compensation and professional fees[129]. - The company may not be able to recover all operating expenses due to inflation, which could adversely impact its financial performance[128]. - The company faces risks associated with real estate investments, including potential decreases in property values and the inability to sell properties at favorable prices[125]. - The company’s ability to maintain distributions may be affected by cash flow from operations, with potential changes evaluated throughout 2025[256]. Competition and Market Risks - The company faces significant competition in acquiring healthcare-related facilities, which may increase costs and impede investment opportunities[113]. - Competition from other medical practices and facilities could adversely affect tenants' ability to make rental payments[153]. - The healthcare industry is facing increased competition and scrutiny, leading to higher expenses and pressure to reduce payments to service providers[194]. Regulatory and Compliance Risks - The company is subject to various regulatory risks that could impact operations and profitability, including potential audits and investigations[103]. - The healthcare industry is heavily regulated, and changes in laws or regulations could adversely affect tenants' ability to make rent payments[168]. - Failure to obtain necessary licenses or certificates of need (CON) could prevent facilities from operating as intended, impacting rent payments[169]. - The company may face adverse legislative or regulatory tax changes that could increase tax liability or reduce operating flexibility[232]. Debt and Financial Structure - As of December 31, 2024, the company's outstanding debt totaled 1.7billion,with8.22,070,668,000, an increase from 1,866,618,000in2023,representinganincreaseofapproximately10.91,430,539,000 (88.3% of revenue) from 1,335,817,000(89.777,124,000 in 2024, driven by acquisitions and increased occupancy[335]. - Total rental expenses decreased to 53,239,000(28.557,475,000 (30.2% of real estate revenue) in 2023, primarily due to dispositions of OM buildings[341].
