Healthcare Realty Trust Reports Results for the Second Quarter

NASHVILLE, Tenn., Aug. 08, 2023 (GLOBE NEWSWIRE) -- Healthcare Realty Trust Incorporated (:HR) today announced results for the second quarter ended June 30, 2023. The Company reported net loss attributable to common stockholders of $82.8 million, or $0.22 per diluted common share, for the quarter ended June 30, 2023. Normalized FFO for the three months ended June 30, 2023 totaled $149.8 million, or $0.39 per diluted common share.

Salient quarterly highlights include:

• Normalized FFO per share totaled $0.39.
• Merger Combined Same Store cash NOI, including the Company's share of joint ventures, for the second quarter increased 2.1% over the prior year, and 2.9% for the trailing twelve months ended June 30, 2023.
• The Company merged with Legacy HTA on July 20, 2022. Beginning in third quarter of 2022, the Company reported combined company same store results, which are now referred to as Merger Combined Same Store. Merger Combined Same Store includes the Company’s same store properties, including Legacy HTA properties, that were owned for the full comparative period, and that meet each other element of the Company’s same store criteria. The Company presents the combined companies’ same store portfolios to provide an understanding of the operating performance and growth potential of the combined company.
• Predictive growth measures in the Merger Combined Same Store portfolio include:
  • Average in-place rent increases of 2.7%
  • Future annual contractual increases of 3.0% for leases commencing in the quarter.
  • Weighted average MOB cash leasing spreads of 3.0% on 598,000 square feet renewed:
    • 6% (<0% spread)
    • 16% (0-3%)
    • 62% (3-4%)
    • 15% (>4%)
  • Tenant retention of 80.5%
  • Year-over-year absorption of 26,000 square feet resulted in an average occupancy increase of 20 basis points, to 89.0%.
• Portfolio leasing activity that commenced in the second quarter totaled 1,041,000 square feet related to 306 leases:
  • 736,000 square feet of renewals
  • 305,000 square feet of new and expansion leases
• The Company executed new leases totaling 376,000 square feet in the quarter that will commence in future periods, an increase of 57% over the first quarter.
• The total portfolio leased percentage was 88.9% at June 30, which was 150 basis points greater than portfolio occupancy. The portfolio leased percentage increased 30 basis points from the first quarter.
• Since the end of the first quarter, the Company sold three properties totaling $21.6 million. The Company expects to generate over $300 million of proceeds related to properties under contract or letters of intent that are expected to be sold by year-end.
• Net debt to adjusted EBITDA was 6.6 times at the end of the quarter. Leverage is expected to decline from additional asset sales and underlying portfolio NOI growth.
• A dividend of $0.31 per share was paid in June. A dividend of $0.31 per share will be paid on August 30, 2023 to stockholders and OP unitholders of record on August 15, 2023.
• On Tuesday, August 8, 2023, at 11:00 a.m. Central 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. Conference Call Access Details: Domestic Dial-In Number: +1 833-470-1428 access code 294698; All Other Locations: +1 404-975-4839 access code 294698. Replay Information: Domestic Dial-In Number: +1 866-813-9403 access code 594252; All Other Locations: +1 929-458-6194 access code 594252.

Healthcare Realty Trust is a real estate investment trust that integrates owning, managing, financing and developing income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. As of June 30, 2023, the Company was invested in over 700 real estate properties totaling more than 40 million square feet and provided leasing and property management services to over 35 million square feet nationwide.

^{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: failure to realize the expected benefits of the Merger; significant transaction costs and/or unknown or inestimable liabilities; the risk that HTA’s business will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; 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, including the currently ongoing COVID-19 pandemic; 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 2022 Annual Report on Form 10-K and in its other filings with the SEC.}

^{1 Includes Legacy HTA's cumulative dividends in excess of earnings.}