Real estate investment firm Healthpeak Properties has agreed to merge with Physicians Realty Trust into a 52 million-square-foot enterprise worth approximately $21 billion.

The new business will have a stake in over 30 markets and include 40 million square feet of outpatient medical properties in Dallas, Houston, Nashville, Phoenix, Denver, and other lucrative markets. Together, both companies expect to make at least $40 million in revenue by the end of year one and up to $60 million by the end of year two.

Under the terms of their agreement, Healthpeak shareholders will own approximately 77% of the company, while those of Physicians Realty Trust will own the other 23%. It will be named Healthpeak Properties and based in Denver, but will have other existing offices.

“With a broader footprint in strategically important markets and a high-quality portfolio, we will be able to better serve the real estate needs of leading health system, physician, and biopharma tenants, which we believe is a competitive advantage that should lead to more opportunities for growth and enhanced value creation for shareholders,” said Scott Brinker, president, and chief executive officer of Healthpeak, in a statement.

HealthPeak currently owns $20 billion in real estate, particularly lab and outpatient medical office facilities, while Physicians Realty Trust acquires, develops, owns, and manages healthcare properties leased to physicians, hospitals, and healthcare delivery systems.

Both have built up relationships with leading health systems, biopharma companies, and physicians, and will share best practices in property management, leasing, asset management, and technology. These practices, they say, could potentially increase revenue and cost savings, as well as reduce general and administrative expenses and increase liquidity, which would improve the cost of the company’s capital and facilitate external growth.

Brinker will serve as president and chief executive officer, while John Thomas, the president and chief executive officer of Physicians Realty Trust, will be the vice chair of the board, which will consist of eight existing Healthpeak directors and five from Physicians Realty Trust. Leading the board will be Katherine Sandstrom, the current board chair for Healthpeak.

“We are confident in our strategic vision to capitalize on our increased scale, complementary platforms, and deep relationships to create immediate and future value for both shareholders and tenants,” said Thomas in a statement.

As part of the deal, Healthpeak will assume Physicians Realty Trust’s existing senior unsecured notes and term loan and enter into a new five-year, $500 million term loan.

The new company will trade under the ticker symbol, "DOC" on the New York Stock Exchange. Both boards have approved the merger.

The deal is expected to be tax-free and close at the end of 2024.

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