Investor FAQs

Following are some of the more frequently asked questions and answers relating to our structure, our management, our business and an offering of this type.

Q: What is Healthcare Trust of America, Inc.?

A: We are an existing and active real estate investment trust, or REIT. We own a diversified portfolio of medical office buildings and healthcare-related facilities. For more information, please visit the overview section of our web site.

Q: Are you self-managed?

A: Yes. As discussed below, this means that our company is managed by its own internal management team, rather than by an external advisor.

Q: What does “self-management” mean?

A: Self-management is a corporate model based on internal management rather than external management. In general, non-traded REITs are externally managed. With external management, a REIT is dependent upon an external advisor. An externally-managed REIT typically pays significant acquisition fees, asset management fees, property management fees and other fees to its advisor.

In contrast, under our self-management program, we are managed internally by our management team led by Scott D. Peters, our Chairman of the Board, Chief Executive Officer and President, as well as our experienced board of directors. With a self-managed REIT, outside fees to third parties are substantially reduced and performance-driven.

Q: Why did you decide to become self-managed?

A: We decided to become self-managed for several reasons:

  • Management Team. We believe that our management team, led by Mr. Peters, has the experience and expertise to efficiently and effectively operate our company. For more information on our management team, please visit the Our Team section of our web site. In addition to Mr. Peters, our President and Chief Executive Officer, we have also hired Kellie S. Pruitt as our Chief Accounting Officer, Treasurer and Secretary, Mark Engstrom as our Executive Vice President – Acquisitions, Christopher Balish as our Senior Vice President – Asset Management and Kelly Hogan as our Controller and Assistant Secretary. Our internal management team will manage our day-to-day operations and oversee and supervise our employees and third party service providers, who will be retained on an as-needed basis. All key personnel will report directly to Mr. Peters.We have 19 employees in total and only expect to hire two to four more employees in the near future. We plan to add an additional acquisition associate, asset manager and a financial analyst as we continue to grow. All of our employees are 100% dedicated to our company on a full-time basis.Our current organizational structure is designed to support an asset base of $2.0-$3.0 billion depending on the composition of the assets acquired, and we have hired sufficient personnel to support this asset base. As we grow, we will add the appropriate staff to accommodate the increased volume at compensation levels commensurate with the duties of the positions added.
  • Governance. An integral part of our self-management program is our experienced board of directors. Our board of directors provides effective ongoing governance for our company and spends a substantial amount of time overseeing our transition to self-management. Our governance and management framework is one of our key strengths.
  • Significantly Reduced Cost. From inception through March 31, 2009, we incurred to our former external advisor, Grubb & Ellis Healthcare REIT Advisor, LLC (”REIT Advisor”), and its affiliates approximately $29,388,000 in acquisition fees; approximately $9,036,000 in asset management fees; approximately $3,828,000 in property management fees; and approximately $1,145,000 in leasing fees. We expect third party property management expenses and third party acquisition expenses, including legal fees, due diligence fees and closing costs, to remain approximately the same as under external management. We believe that the total cost of the self-management program will be substantially less than the cost of external management. While our board of directors, including a majority of our independent directors, previously determined that the fees to REIT Advisor were fair, competitive and commercially reasonable to us and on terms and conditions not less favorable to us than those available from unaffiliated third parties, we now believe that by having our own employees and independent consultants manage our operations and retain third party providers, we will significantly reduce our cost structure.
  • No Internalization Fees. Unlike many other non-listed REITs that internalize or pay to acquire various management functions and personnel, such as advisory and asset management services, from their sponsor or advisor prior to listing on a national securities exchange for substantial fees, we will not be required to pay such fees under our self-management program. We believe that by not paying such fees, as well as operating more cost-effectively under our self-management program, we will save a substantial amount of money. To the extent that our management and board of directors determine that utilizing third party service providers for certain services is more cost-effective than conducting such services internally, we will pay for these services based on negotiated terms and conditions consistent with the current marketplace for such services on an as-needed basis.
  • Funding of Self-Management. We believe that the cost of the self-management program will be substantially less than the cost of external management. Therefore, although we are incurring additional costs now related to our transition to self-management, we expect the cost of the self-management program to be effectively funded by future cost savings. Pursuant to the amended advisory agreement, we have already reduced acquisition fees and asset management fees payable to REIT Advisor, which we believe will result in substantial cost savings. In addition, we anticipate that we will achieve further cost savings in the future as a result of reduced and/or eliminated acquisition fees, asset management fees, internalization fees and other outside fees.
  • Dedicated Management and Increased Accountability. Under our self-management program, our officers and employees will only work for our company and will not be associated with any outside advisor or other third party service providers. Our management team, led by Mr. Peters, has direct oversight of employees, independent consultants and third party service providers on an ongoing basis. We believe that these direct reporting relationships along with our performance-based compensation programs and ongoing oversight by our management team create an environment for and will achieve increased accountability and efficiency.
  • Conflicts of Interest. We believe that self-management works to remove inherent conflicts of interest that necessarily exist between an externally advised REIT and its advisor. The elimination or reduction of these inherent conflicts of interest is one of the major reasons that we elected to proceed with the self-management program.

Q: What is the experience of your board of directors?

A: Our board of directors has diverse and extensive knowledge and expertise in the real estate and healthcare industries. This knowledge and experience includes acquiring, financing, developing, constructing, leasing, managing and disposing of both institutional and non-institutional commercial real estate. In addition, our board of directors has extensive and broad legal, auditing and accounting experience. Our board of directors has numerous years of hands-on and executive commercial real estate experience drawn from a wide range of disciplines. Our board of directors has experienced a number of economic cycles, up and down. Such experience provides us with the capacity to understand and proactively address market changes, and to develop thoughtful investment strategies consistent with our investment objectives.

For more information regarding our board of directors, we encourage you to visit the Our Team section of our web site.

Q: When did you begin the transition to self-management?

On November 14, 2008, we entered into an amended and restated advisory agreement, or the amended advisory agreement, with Grubb & Ellis Healthcare REIT Holdings, L.P., or our operating partnership, REIT Advisor and Grubb & Ellis Realty Investors, LLC, or Grubb &Ellis Realty Investors, the managing member of REIT Advisor, as well as related agreements. The amended advisory agreement became effective as of October 24, 2008 and expires on September 20, 2009, unless sooner terminated pursuant to its terms. We intend to complete our transition to self-management on or before September 20, 2009.

Our main objectives in amending the advisory agreement were to reduce our acquisition and asset management fees and to eliminate the need for internalization by setting the framework for the transition to self-management. We began the transition to self-management immediately after the effective date of the amended advisory agreement. Under the amended advisory agreement, REIT Advisor agreed to use reasonable efforts to cooperate with us as we pursue and implement a self-management program. Upon or prior to completion of our transition to self-management and/or the termination of the amended advisory agreement, we will no longer be advised by REIT Advisor or consider our company to be sponsored by Grubb & Ellis Company, or Grubb & Ellis.

Q: Were you self-managed upon the commencement of your initial offering?

A: No. At the commencement of our initial offering we had minimal assets and operations and we did not believe that it was efficient at that time to engage our own internal management team. We contracted with Grubb & Ellis Healthcare REIT Advisor, LLC, or REIT Advisor, to perform certain advisory services for us as our external advisor. As of March 26, 2009, we had acquired 43 geographically diverse properties and other real estate related assets for a total purchase price of approximately $1,000,520,000. As a result of our growth and success, our board of directors believes that we now have the critical mass required to support a self-management program and have accordingly commenced our transition to self-management. We amended and restated the advisory agreement with REIT Advisor on November 14, 2008 and after the effective date, October 24, 2008, we immediately began the transition to self-management.

Q: What is the role of American Realty Capital II, LLC?

A: We have established a strategic relationship with American Realty Capital II, LLC, or ARC II. Under our Third Party Services Agreement, ARC II will provide general consulting services to us, including assisting and cooperating with our self-management program. In addition, ARC II will make available to us on an ongoing and as needed basis, specific support services, including, without limitation, acquisitions, dispositions, property management, leasing and asset accounting services. ARC II may be entitled to receive a 1.5% subordinated incentive payment as consideration for providing such general consulting services and for making available specific services to us. ARC II will receive additional compensation for specific support services as ARC II is requested to provide such services.

For more information regarding the subordinated incentive payment to ARC II, see the “Comparison of Compensation Payable in Our Offerings” portion of our prospectus.

Q: Who will serve as your dealer manager for this offering?

A: Realty Capital Securities, LLC, or RCS, will serve as our exclusive dealer manager commencing August 29, 2009 for the remainder of our initial public offering, subject to receipt of all regulatory approvals. RCS is an affiliate of ARC II.

Q: Why did you change your name to Healthcare Trust of America, Inc.?

A: We are changing our name in connection with our transition to self-management and to reflect that we will no longer be advised by REIT Advisor or sponsored by Grubb & Ellis, the sponsor of our initial offering.

Q: Where is your principal executive office?

A: The address of our corporate office is The Promenade, 16427 North Scottsdale, Suite 440, Scottsdale, AZ 85254 and our telephone number at that address is (480) 998-3478.

Q: Do you currently own any properties or other real estate related assets?

A: As of June 30, 2009, we owned 43 geographically diverse properties and one other real estate related asset comprising 5.5 million square feet of gross leasable area, or GLA, located in 19 states, with an aggregate purchase price of our total portfolio of approximately $1.1 billion and an average occupancy for the consolidated properties of 90%.

For more information on our properties, we encourage you to review our SEC filings and visit the section of our web site.

Q: What are your investment objectives?

A: Our investment objectives are:

  • to acquire quality properties that generate sustainable growth in cash flow from operations to pay regular cash distributions;
  • to preserve, protect and return your capital contribution;
  • to realize growth in the value of our investments upon our ultimate sale of such investments; and
  • to be prudent, patient and deliberate taking into account current real estate markets.

Each property we acquire is carefully and diligently reviewed and analyzed to make sure it is consistent with our short and long-term investment objectives. Our goal is to at all times maintain a strong balance sheet and always have sufficient funds to deal with short and long-term operating needs. Macro-economic disruptions have broadly impacted the economy and have caused an imbalance between buyers and sellers of real estate assets, including medical office buildings and other healthcare related real estate assets. We anticipated that these tough economic conditions would create opportunities for our company to acquire such assets at higher capitalization rates, as the real estate market adjusted downward. In the fourth quarter of 2008, we opted not to proceed with certain deals which we determined merited re-pricing. We renegotiated other deals to lower pricing points. We had cash on hand of over $128,000,000 as of December 31, 2008, which we intend to use to acquire assets that are priced at levels consistent with today’s economy. We believe that during this turbulent economic cycle, our cash on hand will provide our company with opportunities to acquire medical office buildings and other healthcare related real estate assets at favorable pricing.

Q: What is an “UPREIT”?

A: UPREIT stands for Umbrella Partnership Real Estate Investment Trust. We use the UPREIT structure because a contribution of property directly to us is generally a taxable transaction to the contributing property owner. In this structure, a contributor of a property who desires to defer taxable gain on the transfer of his or her property may transfer the property to the partnership in exchange for limited partnership units and defer taxation of gain until the contributor later exchanges his or her limited partnership units, normally, on a one-for-one basis for shares of the common stock of the REIT. We believe that using an UPREIT structure gives us an advantage in acquiring desired properties from persons who may not otherwise sell their properties because of unfavorable tax results.

Q: Will I be notified of how my investment is doing?

A: Yes. You will receive periodic updates on the performance of your investment with us, including:

  • four quarterly investment statements, which will generally include a summary of the amount you have invested, the monthly distributions declared and the amount of distributions reinvested under our distribution reinvestment plan, as applicable;
  • an annual report after the end of each year; and
  • an annual IRS Form 1099 after the end of each year.

Q: When will I get my detailed tax information?

A: Your Form 1099 tax information will be placed in the mail by January 31 of each year.

Q: Who can help answer my questions?

A: For questions about the offering or to obtain additional copies of this prospectus, contact your registered broker-dealer or investment advisor or contact:

Healthcare Trust of America, Inc.
16427 North Scottsdale Road, Suite 440
Scottsdale, AZ 85254
Telephone: (480) 998-3478
Realty Capital Securities, LLC
Three Copley Place, Suite 3300
Boston, MA 02116
Telephone: (877) 373-2522