Healthcare Realty Trust IncHR

Healthcare Realty Trust Inc Fair Value Disclosure

10-KFiled Feb 13, 20262 min read
Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practical to estimate that value.
•Cash, cash equivalents and restricted cash - The carrying amount approximates fair value (level 1 inputs) due to the short-term maturity of these investments.
•Real estate notes receivable - Real estate notes receivable is recorded in other assets on the Company's Consolidated Balance Sheets. Fair value is estimated using cash flow analyses, based on current interest rates for similar types of arrangements using level 2 inputs in the hierarchy. However, the fair value of one note receivable at December 31, 2024, was determined utilizing the fair value of the receivable's collateral, which was determined based on an executed purchase and sale agreement of the underlying collateral, and therefore was classified as level 1 inputs in the hierarchy.
•Borrowings under the unsecured credit facility and the Term Loans - The carrying amount approximates fair value because the borrowings are based on variable market interest rates.
•Senior Notes and Mortgage notes payable - The fair value of notes and bonds payable is estimated using cash flow analyses, based on the Company’s current interest rates for similar types of borrowing arrangements.
•Interest rate swap agreements - Interest rate swap agreements are recorded in other assets/liabilities on the Company's Consolidated Balance Sheets at fair value. Fair value is estimated by utilizing pricing models, level 2 inputs, which consider forward yield curves and discount rates. See Note 10 for additional information.
The table below details the fair value and carrying values for our other financial instruments as of December 31, 2025 and 2024. 
 December 31, 2025December 31, 2024
Dollars in millionsCARRYING VALUEFAIR VALUECARRYING VALUEFAIR VALUE
Notes and bonds payable 1, 2
$3,911.4 $3,928.8 $4,662.8 $4,578.4 
Real estate notes receivable $87.0 $86.5 $127.2 $122.4 
1Level 2 – model-derived valuations in which significant inputs and significant value drivers are observable in active markets.
2Fair value for senior notes includes accrued interest as of December 31, 2025 and December 31, 2024.

Historical Timeline

Fiscal YearFiled
2025Feb 13, 2026Showing above
2024Feb 19, 2025
2023Feb 16, 2024
2022Mar 1, 2023
2021Mar 1, 2022
2020Feb 24, 2021
2019Feb 18, 2020
2018Feb 19, 2019
2017Feb 20, 2018
2016Feb 21, 2017
2015Feb 22, 2016

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

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