NASHVILLE, Tenn., Oct. 30, 2024 (GLOBE NEWSWIRE) -- Healthcare Realty Trust Incorporated (NYSE:HR) today announced results for the third quarter ended September 30, 2024. Net (loss) income attributable to common stockholders for the three months ended September 30, 2024 was $(93.0) million, or $(0.26) per diluted common share.
KEY THIRD QUARTER HIGHLIGHTS
Normalized FFO per share of $0.39, up 1.2% over the prior year period
$875 million of proceeds from JV and asset sale transactions through October
$447 million of share repurchases year-to-date through October
159,000 square feet, or 49 basis points, of multi-tenant absorption
431,000 square feet of signed new leases in the quarter, the fifth consecutive quarter above 400,000
CAPITAL ALLOCATION
The Company closed joint venture and asset sale transactions since the second quarter totaling $478 million bringing proceeds to approximately $875 million through October, which includes the following:
$522 million from joint venture transactions
$353 million from asset sales
The Company has additional transactions under contract and letters of intent that are expected to increase proceeds to approximately $1.1 billion for the year.
Through October, the Company has repurchased 27.1 million shares totaling $446.8 million at an average price of $16.48 per share.
MULTI-TENANT OCCUPANCY AND ABSORPTION
Multi-tenant sequential occupancy gains continue to track towards full year 2024 expectations provided in the February 2024 Investor Presentation as shown below:
3Q 2024
YTD 2024
Absorption (SF)
158,720
341,473
Change in occupancy (bps)
+ 49
+ 106
The multi-tenant portfolio occupancy rate was 86.5% and the leased percentage was 87.8% at September 30.
Multi-tenant occupancy has increased by 164 basis points over the trailing-twelve-month period. For the Legacy HTA properties, multi-tenant occupancy has increased by 230 basis points for the same period.
An updated multi-tenant occupancy and NOI bridge can be found on page 5 of the Key Highlights Investor Presentation located on the Company's website.
LEASING
Portfolio leasing activity that commenced in the third quarter totaled 1,641,000 square feet related to 455 leases:
1,054,000 square feet of renewals
587,000 square feet of new and expansion lease commencements
The Company signed new leases totaling 431,000 square feet in the quarter, the fifth consecutive quarter above 400,000.
SAME STORE
Same Store cash NOI for the third quarter increased 3.1% over the same quarter in the prior year.
Tenant retention for the third quarter was 80.5%.
Operating expenses decreased 1.5% over the same quarter in the prior year.
Third quarter predictive growth measures in the Same Store portfolio include:
Average in-place rent increases of 2.8%.
Future annual contractual increases of 3.1% for leases commencing in the quarter.
Weighted average MOB cash leasing spreads of 3.9% on 847,000 square feet renewed:
7% (<0% spread)
7% (0-3%)
58% (3-4%)
28% (>4%)
BALANCE SHEET
As of September 30, 2024, net debt to adjusted EBITDA was 6.7 times. Net debt to adjusted EBITDA is expected to be 6.5 times at the end of the year.
In October, the Company repaid the remaining $100 million outstanding of Unsecured Term Loan maturing July 2025.
As of September 30, 2024, the Company had approximately $1.3 billion of availability under its credit facility.
DIVIDEND
A dividend of $0.31 per share was paid in August 2024. A dividend of $0.31 per share will be paid on November 27, 2024 to stockholders and OP unitholders of record on November 12, 2024.
GUIDANCE
The Company's 2024 per share guidance ranges are as follows:
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EXPECTED 2024
ACTUAL
PRIOR
CURRENT
3Q 2024
YTD
LOW
HIGH
LOW
HIGH
Earnings per share
$
(0.26
)
$
(1.49
)
$
(1.50
)
$
(1.40
)
$
(1.60
)
$
(1.59
)
NAREIT FFO per share
$
0.21
$
0.23
$
0.77
$
0.82
$
0.58
$
0.59
Normalized FFO per share
$
0.39
$
1.16
$
1.53
$
1.58
$
1.55
$
1.56
The Company's 2024 guidance range includes activities outlined in the Components of Expected FFO on page 29 of the Supplemental Information.
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The 2024 annual guidance range reflects the Company's view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels, interest rates, and operating and general and administrative expenses. The Company's guidance does not contemplate impacts from gains or losses from
dispositions, potential impairments, or debt extinguishment costs, if any. There can be no assurance that the Company's actual results will not be materially higher or lower than these expectations. If actual results vary from these assumptions, the Company's expectations may change.
EARNINGS CALL
On Wednesday, October 30, 2024, at 11:00 a.m. Eastern Time, Healthcare Realty Trust has scheduled a conference call to discuss earnings results, quarterly activities, general operations of the Company and industry trends.
Simultaneously, a webcast of the conference call will be available to interested parties at https://investors.healthcarerealty.com/corporate-profile/webcasts under the Investor Relations section. A webcast replay will be available following the call at the same address.
All Other Locations: +1 866-813-9403 access code 780754.
Healthcare Realty (NYSE: HR) is a real estate investment trust (REIT) that owns and operates medical outpatient buildings primarily located around market-leading hospital campuses. The Company selectively grows its portfolio through property acquisition and development. As the first and largest REIT to specialize in medical outpatient buildings, Healthcare Realty's portfolio includes over 650 properties totaling nearly 40 million square feet concentrated in 15 growth markets.
Additional information regarding the Company, including this quarter's operations, can be found at www.healthcarerealty.com. In addition to the historical information contained within, this press release contains certain forward-looking statements with respect to the Company. Forward-looking statements are statements that are not descriptions of historical facts and include statements regarding management's intentions, beliefs, expectations, plans or predictions of the future, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Because such statements include risks, uncertainties and contingencies, actual results may differ materially and in adverse ways from those expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, without limitation, the following: the Company's expected results may not be achieved; failure to realize the expected benefits of the Merger; significant transaction costs and/or unknown or inestimable liabilities; risks related to future opportunities and plans for the Company, including the uncertainty of expected future financial performance and results of the Company; the possibility that, if the Company does not achieve the perceived benefits of the Merger as rapidly or to the extent anticipated by financial analysts or investors, the market price of the Company's common stock could decline; general adverse economic and local real estate conditions; changes in economic conditions generally and the real estate market specifically; legislative and regulatory changes, including changes to laws governing the taxation of REITs and changes to laws governing the healthcare industry; the availability of capital; changes in interest rates; competition in the real estate industry; the supply and demand for operating properties in the Company's proposed market areas; changes in accounting principles generally accepted in the US; policies and guidelines applicable to REITs; the availability of properties to acquire; the availability of financing; pandemics and other health concerns, and the measures intended to prevent their spread and the potential material adverse effect these matters may have on the Company's business, results of operations, cash flows and financial condition. Additional information concerning the Company and its business, including additional factors that could materially and adversely affect the Company's financial results, include, without limitation, the risks described under Part I, Item 1A - Risk Factors, in the Company's 2023 Annual Report on Form 10-K and in its other filings with the SEC.
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Consolidated Balance Sheets
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
ASSETS
3Q 2024
2Q 2024
1Q 2024
4Q 2023
3Q 2023
Real estate properties
Land
$
1,195,116
$
1,287,532
$
1,342,895
$
1,343,265
$
1,387,821
Buildings and improvements
10,074,504
10,436,218
10,902,835
10,881,373
11,004,195
Lease intangibles
718,343
764,730
816,303
836,302
890,273
Personal property
9,246
12,501
12,720
12,718
12,686
Investment in financing receivables, net
123,045
122,413
122,001
122,602
120,975
Financing lease right-of-use assets
77,728
81,401
81,805
82,209
82,613
Construction in progress
125,944
97,732
70,651
60,727
85,644
Land held for development
52,408
59,871
59,871
59,871
59,871
Total real estate investments
12,376,334
12,862,398
13,409,081
13,399,067
13,644,078
Less accumulated depreciation and amortization
(2,478,544
)
(2,427,709
)
(2,374,047
)
(2,226,853
)
(2,093,952
)
Total real estate investments, net
9,897,790
10,434,689
11,035,034
11,172,214
11,550,126
Cash and cash equivalents1
22,801
137,773
26,172
25,699
24,668
Assets held for sale, net
156,218
34,530
30,968
8,834
57,638
Operating lease right-of-use assets
259,013
261,976
273,949
275,975
323,759
Investments in unconsolidated joint ventures
417,084
374,841
309,754
311,511
325,453
Other assets, net and goodwill
491,679
559,818
605,047
842,898
822,084
Total assets
$
11,244,585
$
11,803,627
$
12,280,924
$
12,637,131
$
13,103,728
LIABILITIES AND STOCKHOLDERS' EQUITY
3Q 2024
2Q 2024
1Q 2024
4Q 2023
3Q 2023
Liabilities
Notes and bonds payable
$
4,957,796
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