Q3 2024 Healthcare Realty Trust Inc Earnings Call Transcript
Key Points
- Healthcare Realty Trust Inc (HR) reported normalized FFO per share of $0.39, at the high end of expectations, marking a 1.2% increase and a return to year-over-year growth.
- The company achieved strong leasing performance with over 400,000 square feet of new signed leases for the fifth consecutive quarter.
- Occupancy gains were significant, with a multi-tenant absorption totaling 159,000 square feet, driven by 565,000 square feet of new lease commencements and strong tenant retention over 80%.
- Same-store property year-over-year growth was 3.1%, with future contractual escalators for leases commencing at 3.1% in cash and leasing spreads at 3.9%.
- Healthcare Realty Trust Inc (HR) successfully increased its full-year proceeds range from asset sales to $1.05 billion to $1.15 billion, up $100 million at the midpoint, and repurchased nearly $450 million of shares year-to-date.
- The company experienced timing differences in lease commencements, which affected the full potential economics of the quarter.
- There is a $10 million annual NOI exposure from Steward leases that were not accepted by new operators or lack visibility on near-term replacement leases.
- The payout ratio was 106% in the quarter, indicating a higher payout than earnings, although it is expected to decline below 100% in 2025.
- Healthcare Realty Trust Inc (HR) faces challenges in backfilling space from Steward leases, with expectations to recover only half of the $10 million annual NOI through leasing efforts.
- The company had a $47 million credit loss related to the final write-down of a mezzanine loan in Houston, impacting financial results.
Good morning. Thank you, Christian. And the Healthcare Realty's Third Quarter 2024 earnings conference call. My name is Revell Michael, and I'll be your moderator for today. All lines will be made during the presentation portion of call was an opportunity for questions and answers. At the end. I would now like to pass the conference over to our host, Ron Hubbard, Vice President of Investor Relations for health care real estate. Thank you, and you may proceed.
Thank you for joining us today for Healthcare Realty's Third Quarter 2024 earnings conference call. As a reminder that except for historical information, contained within the matters discussed in this call may contain forward looking statements that involve estimates, assumptions, risks, and uncertainties. These risks are more specifically discussing the company's Form 10 K filed with the SEC for the year ended December 31st, 2023, and other SEC filings.
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