Physicians Realty Trust

Greetings and welcome to the Physicians Realty Trust First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brad Page, Senior Vice President, General Counsel. Thank you, Brad. You may begin.

Thank you, Paul. Good afternoon and welcome to the Physicians Realty Trust first quarter 2021 earnings conference call and webcast. Joining me today are John Thomas, Chief Executive Officer, Jeff Tyler, Chief Financial Officer, Jeanne Taylor, Chief Investment Officer, Mark Thine, Executive Vice President, Asset Management, John Lucey, Chief Accounting and Administrative Officer, and Lori Becker, Senior Vice President, Controller. During this call, John Thomas will provide a summary of the company's activities and performance for the first quarter of 2021 and year to date, as well as our strategic focus for 2021. Jeff Tyler will review our financial results for the first quarter of 2021. Then Mark Fine will provide a summary of our operations for the first quarter. Following that, we will open the call for questions. Today's call will contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. They are based on the current beliefs of management and information currently available to us. Our actual results will be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control or ability to predict. Although we believe our assumptions are reasonable, our forward-looking statements are not guarantees of future performance or actual results could materially differ from our current expectations and those anticipated or implied in such forward-looking statements. For a more detailed description of potential risks and other important factors that could cause actual results to differ from those contained in any forward-looking statements, please refer to our filings with the Securities and Exchange Commission. With that, I would now like to call over to the company's CEO, John Thomas. John?

Thank you, Brad, and thank you for joining us this afternoon. Physicians Realty Trust is off to a very good start for 2021. This begins with our pure play focus on medical office facilities, which continues to serve us and our shareholders well. While other types of healthcare real estate are just beginning to see signs of a recovery, medical office clinical visits have been and remain at pre-COVID levels and have been for a long time. We credit this operational strength to our nation's healthcare providers who adapted quickly at the onset of the pandemic to manage COVID outbreaks while continuing to provide necessary non-COVID healthcare services. They accomplished this by shifting non-COVID care to the outpatient setting, accelerating a trend that has been apparent for the past 25 years. All indications are that this is a permanent change in the delivery of healthcare that will continue to grow in the years ahead. especially for more acute orthopedics, oncology, and cardiology procedures. Beyond the pandemic, demand for medical office billings continues to grow in line with our nation's continued need for outpatient health care. CMS estimates $4.1 trillion were spent on health care services in 2020, and the national health care spending in the United States is expected to grow at an average annual rate of 5.4%, from 2019 to 2028, outpacing GDP as well. We expect that an outsized portion of this spin will be directed to off-campus facilities in particular, where we continue to see health systems demanding more space. The trends in favor of medical office have proven to be very predictable and reliable, and as a result, we expect our portfolio to produce a consistent and reliable rental income stream with steady growth over time for the benefit of our shareholders. Public investors in healthcare real estate can count on medical office to remain open, occupied, and busy. Medical office does not need to recover. As an asset class, it was only impacted temporarily in spring 2020, and Doc has maintained close to 96% occupancy routinely ever since. We remain focused on growing our funds available for distribution each year and will continue to manage our organization to achieve that result annually. On the acquisitions front, we announced the purchase of a brand new medical office facility with an on-site outpatient surgery center on the campus of Advent Health Hospital in Wesley Chapel, Florida. Several members of our team have long-term relationships with Advent Health, and we hope to find future opportunities for investment with this system across their national footprint. We also finalized commitments to finance three new medical office facilities anchored by leading investment-grade health care systems, with two buildings being off campus and one on campus. We continue to evaluate a number of new development projects and expect a positive uptick in development for the year and going forward. Our investment pipeline continues to grow with visibility on nearly 200 million in prospective opportunities that we expect to close in the coming months, plus a growing number of acquisitions in negotiation that we would expect to execute in the third and fourth quarters. Our growth this year may be slightly weighted to the second half of the year, but we remain very confident in our acquisition guidance of $400 to $600 million in new investments in 2021. In June 2020, we published our inaugural ESG report, sharing our hard work on environmental management of our buildings since 2018 and progress toward ambitious goals to improve the energy utilization and waste management of all of our facilities. We will publish our second annual ESG report in June 2021, and we will be proud to report great progress on all of our environmental, social, and governance goals and the DOT culture. Under Mark Dine's leadership, Physicians Realty Trust earned the EPA's Energy Star Partner of the Year, and we expect this to be the first of many awards recognizing our commitment and success in reducing our carbon footprint and providing a better setting for our physicians and providers through better managed buildings. Jeff will now review our financial results, and Mark Dahn will share our operating results. Jeff?