Invest in better

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Invest_Art_R2

Dear Shareholders,

Physicians Realty Trust (NYSE: DOC) had a successful 2018. With high levels of U.S. employment and its accompanying employer-based health insurance model, the underlying healthcare economy has grown to roughly $3.5 trillion annually, based upon late 2018 federal statistics. The value of medical office real estate continues to be very strong. That said, the capital markets generally did not favor publicly traded real estate investment trusts (REITs). As a result, we did not pursue the pace of external growth that we realized in the first four years of our company, concentrating our $252 million in 2018 investments on four of the highest quality MOBs in the country. Internally, we focused on improving our operational processes and performance, while devoting significant attention to our existing client relationships. We remain confident in the long-term stability and growth potential of our portfolio, strategy, and team, all of which we believe will continue to produce reliable cash flows in the years to come.

WE INVEST IN BETTER.

With this backdrop, our 2018 and forward strategy can be summarized by our new company tagline, Invest in better.™  Due to strong asset valuations, we capitalized upon the opportunity to sell older, less strategically valuable properties and replaced them with better, bigger, and more modern medical office facilities occupied by high-quality health system clients that expanded upon our existing relationships and improved our financial base.
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Investment and Portfolio Statistics

INVESTMENT GRADE AFFILIATED TENANCY

Percent Leased GLA

IG Grade Tenants_R3

2018

RELIABLE CASH FLOWS: The Company’s unmatched focus on tenant credit quality maximizes value to our shareholders by preserving the safety and predictability of tenant cash flows.

EXPIRING TENANT RENTS

2019-2023

ExpiringTenants_R2 - 20% 40% 60% 80% DOC H T A HR 21% 51% 65%

SUPERIOR STABILITY: The DOC portfolio provides industry leading stability, exceeding our closest peers in remaining lease term and occupancy.

CAPITAL RECYCLING

2018 Investment Activity

Dispositions

-

Assets

$-M

Sale Proceeds

-

AVG GLA

-%

Leased

-%

on-campus / affiliated

acquisitions

-

Assets

$-M

Invested Capital

-

AVG GLA

-%

leased

-%

on-campus / affiliated

Debt Maturity Schedule

As of December 31, 2018

DebtMaturity_2018_R5

RESPONSIBLE LEVERAGE: DOC's well-laddered debt maturity schedule is a result of our continued commitment to responsible borrowing. Nearly 90% of the Company's leverage is fixed at a weighted average borrowing rate of 3.85%, ensuring that investments remain profitable irrespective of interest rate market changes.

TOTAL PERFORMANCE RETURN SINCE IPO

As of December 31, 2018

DOC-TotalPerformance-2018_R3

Timeline

Since our founding in July 2013, DOC's incredible growth has been built on strong relationships with physicians and hospital executives across the country and centered on a culture of industry-leading customer service and operational excellence.

We C.A.R.E.

Physicians Realty Trust (NYSE:DOC) is on a mission to help medical providers, developers, and shareholders realize better healthcare, better communities, and better returns.
Learn more about our team and commitment to the values of C.A.R.E.
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CARE_Art_R2

COLLABORATE & COMMUNICATE.

We have developed a collaborative culture of mutual respect, and every team member has a sense of pride in what we accomplish together. We strive for true partnerships, working toward a common purpose and shared success.

ACT with INTEGRITY.

Integrity and transparency are at the heart of all that we do. We believe that performing to the highest standards on behalf of our healthcare partners, team members, and investors is fundamental to our identity as a company.

RESPECT the RELATIONSHIP.

We continually support our partners so they can provide outstanding healthcare services in their communities. We are committed to providing industry-leading customer service.

Execute consistently.

We deliver on our promises the first time and every time. By promoting a culture of innovation and creativity, and above all, consistency, we exceed our clients’ expectations.

Portfolio

As of December 31, 2018

-

HEALTHCARE PROPERTIES

Totaling 13,624,598 GLA

-

States

Across the U.S.

$-

Million

Invested in 2018

WE HAVE GROWN OUR GROSS REAL ESTATE ASSET PORTFOLIO
FROM $124 MILLION SINCE OUR IPO TO NEARLY $4.4 BILLION TODAY.

All Other DOC-Owned Properties

2018 Acquistions

HMG Medical Plaza | Kingsport, TN
Northside Medical Midtown | Atlanta, GA
HealthEast Clinic & Specialty Center | Maplewood, MN
Lee’s Hill Medical Plaza | Fredericksburg, VA

Company Leadership

HLINE_Stroke

John T. Thomas

President & Chief Executive Officer

John T. Thomas is our President and Chief Executive Officer and has served on our Board of Trustees since August 2013.
Mr. Thomas was the Executive Vice President-Medical Facilities Group for Welltower Inc. (NYSE: WELL, formerly known as Health Care REIT Inc.) from January 2009 to July 2012 where his group was responsible for growing total net investments for the company’s medical facilities division, including hospitals, medical office buildings,

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John T. Thomas

President & Chief Executive Officer

John T. Thomas is our President and Chief Executive Officer and has served on our Board of Trustees since August 2013.

Mr. Thomas was the Executive Vice President-Medical Facilities Group for Welltower Inc. (NYSE: WELL, formerly known as Health Care REIT Inc.) from January 2009 to July 2012 where his group was responsible for growing total net investments for the company’s medical facilities division, including hospitals, medical office buildings, and life science research facilities, from $2.3 billion in assets to approximately $5 billion.

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Jeffrey N. Theiler

EVP, Chief Financial Officer

Jeffrey N. Theiler is our Executive Vice President and Chief Financial Officer. Mr. Theiler became an executive officer in July 2014.

Prior to joining the Company, from 2010 to 2014, Mr. Theiler served as a Senior Equity Research Analyst with Green Street Advisors. From 2003 to 2008, Mr. Theiler worked as a Vice President and Associate in the real estate investment banking divisions of Banc of America Securities and Lehman Brothers.

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D. Deeni Taylor

EVP, Chief Investment Officer

D. Deeni Taylor is our Executive Vice President and Chief Investment Officer, a position he has held since January 2017. From October 2015 through December 2016, Mr. Taylor was our Executive Vice President – Investments.

From 2006 until 2015, Mr. Taylor served as an Executive Vice President of Indianapolis based Duke Realty, Inc. (NYSE: DRE), helping to lead Duke’s healthcare team.

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Mark D. Theine

EVP, Asset & Investment Management

Mark D. Theine is our Executive Vice President of Asset and Investment Management. From our IPO in July 2013 until February 2019, he was our Senior Vice President of Asset and Investment Management.

In this role, Mr. Theine oversees the asset management, operations, and leasing teams, providing hospital and physician clients with high-quality management services while implementing strategies to maximize property and portfolio values.

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John W. Lucey

Chief Accounting and Administrative Officer

John W. Lucey is our Chief Accounting and Administrative Officer. Previously, he served as our Senior Vice President, Chief Accounting and Administrative Officer, from May 2016 to February 2019 and Senior Vice President, Principal Accounting and Reporting Officer, from our IPO in July 2013 until April 2016.

Mr. Lucey has more than twenty years of public company financial experience, including ten years in the senior living healthcare industry.

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Bradley D. Page, Esq.

SVP, General Counsel

Bradley D. Page is our Senior Vice President – General Counsel, a position he has held since February 2015.

Prior to joining Physicians Realty Trust, Page spent more than 19 years as a shareholder and practicing attorney at Davis & Kuelthau, s.c., including the last year and a half as President of the firm, when he resigned to accept the General Counsel position with our company. Over his career at Davis & Kuelthau, s.c., Mr. Page represented businesses in all areas of commercial real estate, commercial lending, and corporate and construction transactions, including Physicians Realty Trust.

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Daniel M. Klein

SVP, Deputy Chief Investment Officer

Mr. Klein is our Senior Vice President and Deputy Chief Investment Officer, a position he has held since January 2017.

From January 2016 through March 2016, he was an Executive Vice President at Healthcare Trust of America, Inc. (NYSE: HTA) and was responsible for growing the company’s strategic relationships with its key markets and identifying new markets.

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Laurie P. Becker

SVP, Controller

Ms. Becker is our Senior Vice President, Controller. Previously, she served as Vice President, Controller, from January 2016 to February 2019 and Controller from June 2015 to December 2015.

In this role, Ms. Becker oversees Corporate Accounting and Property Accounting, including managing SEC reporting, SOX compliance, and monthly and quarterly consolidation. Ms. Becker has over 15 years of accounting experience including starting her career in Big 4 public accounting. She has more than 10 years of corporate controllership experience, and most recently spent over five years as Controller of Koss Corporation (NASDAQ: KOSS), where she was brought on to help to lead the company through a significant restatement following a financial fraud.

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David G. Domres CPM® CCIM

Vice President, Construction & Project Management

Mr. Domres is Vice President, Construction and Project Management, a position he has held since our IPO in July 2013.

In this role, Mr. Domres oversees the asset management of our single-tenant properties while driving capital projects and sustainability strategies and execution for the entire portfolio. Previously, he was the Senior Vice President of Corporate Real Estate for US Bank and Senior Vice President of Asset and Property Management with a full-service real estate company.

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Mark Dukes, RPA, CCIM

Vice President, Asset Management

Mr. Dukes is Vice President, Asset Management, a position he has held since joining the company in 2016.

Mr. Dukes is responsible for all operations of a 140-building portfolio of healthcare assets located in 30 states. The properties are mostly on-campus medical office buildings affiliated with major healthcare systems, including Catholic Health Initiatives, Ascension, Baylor Scott & White Health, and Northside Hospital. His core responsibilities include asset management, property management, client relations, and customer satisfaction. Prior to joining Physicians Realty Trust, Dukes was responsible for managing Duke Realty’s healthcare portfolio, totaling over 6.5 million square feet in 16 states.

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Amy M. Hall, CCIM

Vice President, Leasing

Ms. Hall is our Vice President, Leasing, a position she has held since joining the company in 2016.

In this role, she has been instrumental in the implementation of VTS, a cloud-based lease management system designed to create a seamless leasing process. In 2018, her team has steadily increased portfolio occupancy to over 96.6%, the highest occupancy in the healthcare REIT sector while more than tripling the company’s leasing activity during numerous hospital mergers, sales, and consolidations.

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Jennifer A.D. Manna

Vice President, Associate General Counsel

Jennifer A.D. Manna is our Vice President, Associate General Counsel, a position she has held since joining the company in 2016.

Before joining Physicians Realty Trust, Ms. Manna spent nearly eight years practicing at Foley & Lardner LLP, representing clients across the nation in all areas of commercial real estate, commercial lending, and corporate and construction transactions as well as alternative financing structures such as New Markets Tax Credits. Manna also spent over three years as the Corporate Counsel of Wangard Partners, Inc., a regional development company specializing in retail, industrial, office, and multi-family development where she managed all legal aspects of Wangard’s operations.

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Joshua F. Richmond

Vice President, Investments

Mr. Richmond is our Vice President – Investments, a position he has held since September 2015. Residing in Denver, Colorado, he is responsible for the strategy, pursuit, and execution of targeted acquisition, development, and joint-venture opportunities. Before his time at Physicians Realty Trust, Mr. Richmond served in various asset management capacities for Welltower (formerly known as Health Care REIT Inc.). His primary focus was on enhancing key health system relationships and creating portfolio growth strategies.

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Board of Trustees

Governor Thommy G. Thompson

Chairman of the Board

Stanton D. Anderson, Esq.

Compensation Committee Chair

Mark A. Baumgartner

Audit Committee Chair

Albert C. Black, Jr.

Nominating & Corporate Governance Committee Chair

Richard A. Weiss, Esq.

Finance & Investment Committee Chair

William A. Ebinger, M.D.

Trustee

Pamela J. Kessler

Trustee

John T. Thomas

Trustee