Core Insights - Healthcare Realty Trust Incorporated reported a transformational year in 2025, with significant same-store growth and successful asset dispositions totaling $1.2 billion at attractive pricing levels, driven by long-term trends in outpatient medical services demand [2] Financial Performance - For Q4 2025, GAAP net income was $0.04 per share, compared to a loss of $0.31 per share in Q4 2024. The company reported a net loss of $0.71 per share for the full year 2025, down from a loss of $1.81 per share in 2024 [5][6] - NAREIT FFO for Q4 2025 was $0.36 per share, while Normalized FFO was $0.40 per share. For the full year, NAREIT FFO was $1.38 per share, and Normalized FFO was $1.61 per share [6][24] - Same-store cash NOI growth was +5.5% in Q4 2025, driven by an occupancy rate of 82.7% and cash leasing spreads of +3.7% [6] Leasing Activity - In Q4 2025, the company executed 292 new and renewal leases totaling 1.5 million square feet, with a weighted average lease term of 6.2 years and average annual escalators of 3.0% [7] - Full year lease executions reached approximately 5.8 million square feet, including 1.6 million square feet of new leases [6] Capital Allocation - The company completed asset sales of $682 million in Q4 2025 and $1.2 billion for the full year, through 34 transactions at a blended cap rate of 6.7% [6][10] - Significant market exits included a 25-property portfolio sale for $348.9 million, reducing exposure to non-priority markets [10] Balance Sheet and Governance - Net Debt to Adjusted EBITDA improved to 5.4x at year-end 2025, down from 6.1x the previous year. The company repaid approximately $650 million of term loans and $250 million of senior notes [6][8] - The company appointed new leadership, including Peter Scott as President & CEO and Daniel Gabbay as CFO, enhancing its governance and strategic direction [6] Dividend and Guidance - The Board approved a common stock dividend of $0.24 per share, payable on March 11, 2026 [11] - For 2026, the company provided guidance with expected earnings per share ranging from -$0.05 to $0.05, NAREIT FFO per share between $1.44 and $1.50, and same-store cash NOI growth projected at 3.5% to 4.5% [12]

Core Viewpoint - Healthcare Realty Trust Incorporated has appointed Daniel Gabbay as the new Executive Vice President and Chief Financial Officer, effective January 12, 2026, succeeding Austen Helfrich [1][3]. Group 1: Appointment Details - Daniel Gabbay has nearly 20 years of experience in investment banking, most recently serving as a Managing Director at RBC Capital Markets, focusing on the healthcare REIT sector [2]. - Gabbay has a strong track record, having advised on significant transactions, including a $3 billion merger for Sonida Senior Living and a $5 billion merger for Healthpeak Properties [2]. - Peter Scott, President and CEO, expressed confidence in Gabbay's leadership and expertise, highlighting his strategic insight and experience in the sector [3]. Group 2: Transition of CFO Role - Austen Helfrich, who has been CFO since October 2024, will be leaving to pursue new business opportunities [3]. - Peter Scott acknowledged Helfrich's contributions to the company since joining in 2019, thanking him for his financial leadership during a critical period [4]. Group 3: Company Overview - Healthcare Realty Trust is the largest pure-play owner, operator, and developer of medical outpatient buildings in the United States [5]. - The company has maintained its previously issued 2025 Normalized FFO guidance, which was increased in the third quarter 2025 financial results [5].

Core Insights - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1][2] - The investment group emphasizes high-yield, dividend growth investment ideas, targeting dividend yields up to 10% [2] Investment Strategy - The group specializes in research on REITs, ETFs, closed-end funds, preferred stocks, and dividend champions across various asset classes [2] - It aims to help investors achieve dependable monthly income and portfolio diversification [2] Experience and Expertise - The investment group is led by individuals with significant experience in the investment field, including over 14 years of experience and an MBA in Finance [2]

Core Viewpoint - Resolution Capital's investment in Healthcare Realty Trust indicates a belief that valuation and cash flow are more significant than short-term interest rate discussions [1][7]. Company Overview - Healthcare Realty Trust is a leading healthcare-focused REIT that specializes in acquiring, developing, and managing outpatient medical properties across the United States [3][4]. - The company generates revenue primarily through long-term lease agreements with healthcare providers, focusing on outpatient healthcare real estate [4][5]. Financial Metrics - As of November 13, 2025, Healthcare Realty Trust's share price was $18.08, reflecting a 9.91% increase over the past year, although it underperformed the S&P 500 by 2.48 percentage points [2]. - The company reported trailing twelve months (TTM) revenue of $1.17 billion and a dividend yield of 6.07% [2][8]. - The market capitalization of Healthcare Realty Trust is $6.38 billion [2]. Investment Insights - Resolution Capital's new position in Healthcare Realty Trust, comprising 2.2462% of its reportable assets under management, suggests confidence in the stability of the REIT's income stream despite broader market challenges [2][7]. - The REIT's portfolio is designed for long-term leases and steady usage, which has helped maintain cash flow stability even amid rising interest rates [8]. - The ongoing question for investors is whether Healthcare Realty Trust can sustain its dividend funding as financing conditions stabilize [9].

Core Viewpoint - Healthcare Realty Trust (HR) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements, making it a valuable tool for investors [2][4]. - The recent upgrade for Healthcare Realty Trust reflects an improvement in its earnings outlook, which is expected to positively affect its stock price [3][5]. Earnings Estimate Revisions - For the fiscal year ending December 2025, Healthcare Realty Trust is projected to earn $1.60 per share, consistent with the previous year's figure, while the Zacks Consensus Estimate has increased by 0.8% over the past three months [8]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with a strong historical performance, particularly Zacks Rank 1 stocks averaging a +25% annual return since 1988 [7]. - Healthcare Realty Trust's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

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Financial Performance - Rental income for Q3 2025 was $287,399,000, a decrease of 6.9% from $306,499,000 in Q3 2024[12] - Total revenues for the nine months ended September 30, 2025, were $894,243,000, down 6.7% from $958,550,000 in the same period of 2024[12] - Net loss for Q3 2025 was $58,544,000, compared to a net loss of $94,535,000 in Q3 2024, representing a 38.0% improvement[13] - Basic earnings per common share for Q3 2025 were $(0.17), an improvement from $(0.26) in Q3 2024[12] - Comprehensive loss for the nine months ended September 30, 2025, was $269,441,000, compared to $562,022,000 in the same period of 2024, indicating a significant reduction[13] - For the nine months ended September 30, 2025, the net loss was $264,076,000, compared to a net loss of $555,692,000 for the same period in 2024, representing a 52% improvement[17] - The Company reported a net loss of $(58,544) thousand for the three months ended September 30, 2025, resulting in a basic and diluted earnings per share of $(0.17)[102] Revenue and Income Sources - Gain on sales of real estate properties for Q3 2025 was $76,771,000, an increase of 95.5% from $39,310,000 in Q3 2024[12] - Total revenue from contracts with customers for Q3 2025 was $6.886 million, an increase of 37% from $5.020 million in Q3 2024[52] - Management fee income and other for Q3 2025 was $4.707 million, up 77% from $2.657 million in Q3 2024[52] - Revenue from parking income for the three months ended September 30, 2025, was $2.179 million, a decrease from $2.363 million in 2024[52] Expenses and Costs - Property operating expenses for Q3 2025 were $113,456,000, down 5.9% from $120,232,000 in Q3 2024[12] - Total expenses for the nine months ended September 30, 2025, were $835,412,000, a decrease of 9.6% from $924,309,000 in the same period of 2024[12] - Total significant segment expenses for the three months ended September 30, 2025, were $101.4 million, a decrease of 6.8% from $108.6 million in 2024[120] Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2025, was $324,756,000, a decrease from $363,605,000 in 2024[17] - The company had net cash used in financing activities of $534,519,000 for the nine months ended September 30, 2025, compared to $845,294,000 in 2024[17] - The company had net cash provided by investing activities of $184,344 thousand for the nine months ended September 30, 2025, down from $482,149 thousand in 2024, a decline of about 62%[17] Assets and Liabilities - The Company had total assets of $113.05 million and total liabilities of $72.64 million as of September 30, 2025, compared to total assets of $108.15 million and total liabilities of $63.00 million as of December 31, 2024[29] - The Company had $4.49 billion in notes and bonds payable as of September 30, 2025[72] - The Company had $1.4 billion available to be drawn on its $1.5 billion Unsecured Credit Facility as of September 30, 2025[73] Real Estate and Property Management - Total gross investments as of September 30, 2025, amounted to approximately $10.4 billion across 519 consolidated real estate properties[19] - The company provided leasing and property management services to 93% of its portfolio nationwide as of September 30, 2025[19] - The Company had 178 ground leases covering 12.8 million square feet as of September 30, 2025[68] - As of September 30, 2025, the company had 43 properties and two land parcels classified as assets held for sale, compared to three properties as of December 31, 2024[62] Shareholder Information - Total dividends paid for the nine months ended September 30, 2025, were $302,528,000, compared to $348,064,000 in 2024[17] - The Company declared and paid common stock dividends totaling $0.86 per share during the nine months ended September 30, 2025[98] - The Company had a balance of 351,604,207 shares of common stock outstanding as of September 30, 2025, an increase from 350,532,006 shares at the beginning of the period[97] Credit and Impairment - Impairment of real estate properties and credit loss reserves for the nine months ended September 30, 2025, totaled $258,791,000, up from $232,450,000 in the same period of 2024[12] - The allowance for credit losses increased to $18.27 million as of September 30, 2025, up from $16.80 million at the end of 2024[46] - The Company recorded a credit loss reserve of $1.5 million in the second quarter of 2025 due to increased risk of credit loss on a mortgage note receivable[46] Debt and Financing Activities - The Company entered into a new $1.5 billion Unsecured Credit Facility on July 25, 2025, which includes a revolving credit facility and multiple term loan tranches[78] - The Company repaid $250 million of Senior Notes due 2025 at maturity, including $4.8 million of accrued interest[74] - The Company had seven outstanding interest rate swaps with a total notional amount of $500,000 and a weighted average rate of 3.65%[88] Future Outlook and Changes - The company is evaluating the impact of the new accounting standards update (ASU 2024-03) on its financial statements, effective for annual reporting periods beginning after December 15, 2026[54] - The company expects future amortization of non-vested share-based awards to total $27.8 million, with $3.2 million in 2025 and $11.3 million in 2026[114]

Financial Data and Key Metrics Changes - Normalized FFO was $0.41 per share, representing a 5% year-over-year increase [20] - Same-store cash NOI growth was 5.4% for the quarter [20] - Net debt to adjusted EBITDA is now at 5.8 times, down from over six times [7][21] - The company raised both its FFO and same-store guidance for the year [6][22] Business Line Data and Key Metrics Changes - Same-store NOI growth averaged 5.25% over the last two quarters [4] - Same-store occupancy increased by 180 basis points, reaching 91.1% [5][17] - Tenant retention improved to nearly 89%, the highest in six years [16] Market Data and Key Metrics Changes - Demand in the top 100 MSAs outstripped supply by over 740,000 square feet [17] - The leasing pipeline stands at 1.1 million square feet, with two-thirds in the LOI phase [5] - The transaction market for outpatient medical is heating up, with cap rate compression observed [8] Company Strategy and Development Direction - The company is focusing on exceeding its three-year growth framework and improving earnings [4] - There is a strategic shift towards maximizing economic returns rather than volume [5] - The company is actively pursuing redevelopment opportunities and has added five assets to its redevelopment portfolio [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the tailwinds for Healthcare Realty Trust, citing improving secular trends in outpatient medical [5] - The company is transitioning to an operations-oriented culture and is excited about future growth prospects [13] - Management noted that the balance sheet initiatives are nearly complete, allowing for potential future investments [13] Other Important Information - The company has sold $500 million of assets year-to-date at a blended cap rate of 6.5% [9] - A $1 billion ATM equity program and up to $500 million in share buybacks have been authorized [22] Q&A Session Summary Question: Impact of NOI on the portfolio over the next quarters - Management indicated a stabilized year-over-year growth rate of 3 to 4% for the portfolio, with potential upside from redevelopments [26] Question: Health system share of leasing - The increase in health system leasing is attributed to improved tenant relations and a shift towards outpatient settings [30] Question: Cap rate assumptions for dispositions - The cap rate for remaining dispositions is expected to be higher due to the mix of assets, which includes more value-add components [33] Question: Buyer pool changes since dispositions began - The buyer demand remains strong, with a notable improvement in the lending environment fueling appetite [58] Question: Future strategic investments - The company is focusing on joint ventures and selective acquisitions, leveraging existing relationships in priority markets [62]

Core Insights - Healthcare Realty Trust (HR) reported a revenue of $297.77 million for the quarter ended September 2025, reflecting a year-over-year decline of 5.6% [1] - The earnings per share (EPS) for the same period was $0.41, a significant improvement from -$0.26 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $295.43 million, resulting in a surprise of +0.79% [1] - The company also delivered an EPS surprise of +2.5%, with the consensus EPS estimate being $0.40 [1] Revenue Breakdown - Rental income was reported at $287.4 million, which is a -6.2% change compared to the year-ago quarter and below the average estimate of $291.28 million by two analysts [4] - Interest income amounted to $3.48 million, representing a -10.9% change year-over-year and also below the average estimate of $3.69 million [4] - Other operating revenues were reported at $6.89 million, exceeding the average estimate of $5.72 million and showing a year-over-year increase of +37.2% [4] Stock Performance - Over the past month, shares of Healthcare Realty Trust have returned -3.4%, contrasting with the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Healthcare Realty Trust (HR) reported quarterly funds from operations (FFO) of $0.41 per share, exceeding the Zacks Consensus Estimate of $0.40 per share and up from $0.39 per share a year ago [1][2] - The company achieved an FFO surprise of +2.50% and has surpassed consensus FFO estimates three times in the last four quarters [2] - Revenues for the quarter ended September 2025 were $297.77 million, surpassing the Zacks Consensus Estimate by 0.79%, but down from $315.42 million year-over-year [3] Financial Performance - The FFO for the quarter was $0.41 per share, compared to the expected $0.40, indicating a positive surprise [2] - Revenue of $297.77 million was reported, which is a decrease from the previous year's $315.42 million [3] - The company has topped consensus revenue estimates two times over the last four quarters [3] Market Performance - Healthcare Realty Trust shares have increased by approximately 4.7% since the beginning of the year, while the S&P 500 has gained 17.2% [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [7] Future Outlook - The current consensus FFO estimate for the upcoming quarter is $0.40 on revenues of $292.82 million, and for the current fiscal year, it is $1.59 on revenues of $1.18 billion [8] - The estimate revisions trend for Healthcare Realty Trust was mixed ahead of the earnings release, which may change following the recent report [7] Industry Context - The REIT and Equity Trust - Other industry is currently ranked in the top 34% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9]