Healthcare Realty Trust Incorporated (HR) Q2 2025 Earnings Call Transcript
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 01 2025
0mins
Should l Buy HR?
Source: SeekingAlpha
Normalized FFO per share $0.41 for the quarter, up nearly 7% year-over-year, driven by strong occupancy gains, disciplined cost management, and a decrease in share count.
Quarterly FAD per share $0.33, representing a 96% payout ratio, a significant improvement from the first quarter, primarily due to strong earnings growth and lower seasonal maintenance capital.
Same-store cash NOI growth 5.1%, the highest in 9 years, driven by a 100 basis point increase in occupancy and strong expense controls, resulting in a 50 basis point year-over-year margin improvement.
Same-store occupancy 90%, a 40 basis point sequential increase.
Net debt to adjusted EBITDA 6x, with expectations to decrease into the mid-5s by year-end due to disposition proceeds and improved leverage profile.
Year-to-date sales $211 million at a blended 6.2% cap rate, with an additional $700 million of assets under contract or LOI.
Disposition portfolio NOI growth Lagged stabilized portfolio by 700 basis points over the last 2 years, with plans to sell approximately $1 billion of assets in 2025 at a blended cap rate of 7%.
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Analyst Views on HR
Wall Street analysts forecast HR stock price to fall
9 Analyst Rating
1 Buy
7 Hold
1 Sell
Hold
Current: 17.490
Low
14.00
Averages
16.63
High
20.00
Current: 17.490
Low
14.00
Averages
16.63
High
20.00
About HR
Healthcare Realty Trust Incorporated is a self-managed and self-administered real estate investment trust (REIT) that owns and operates medical outpatient buildings primarily located around hospital campuses. The Company selectively grows its portfolio through property acquisition and development. Its portfolio includes over 650 properties totaling more than 38 million square feet concentrated in 15 growth markets. The Company is engaged in a spectrum of integrated services including leasing, management, acquisition, financing, development and redevelopment of such properties. It focuses on facilities primarily located on or near the campuses of acute care hospitals associated with health systems. It owns properties in high-growth markets with a tenant mix that includes over 30 physician specialties, as well as surgery, imaging, cancer, and diagnostic centers. The Company’s real estate portfolio is leased to a diverse tenant base.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Healthcare Realty Trust Q4 2025 Earnings Call Highlights
- Asset Management Upgrade: Healthcare Realty Trust completed the revamp of its asset management platform, resulting in a 60 basis point improvement in cash leasing spreads and a 220 basis point increase in tenant retention, demonstrating significant effectiveness in optimizing asset allocation and enhancing customer satisfaction.
- Strong Financial Performance: The company reported a normalized FFO per share of $0.40 for Q4 2025, with same-store cash NOI growth reaching 5.5%, and a full-year normalized FFO of $1.61, indicating sustained competitiveness and profitability in the market.
- Completion of Asset Disposition Plan: Successfully sold $1.2 billion in assets at a 6.7% cap rate, while reducing total debt by $900 million, leading to a decrease in leverage from 6.4x at the beginning of the year to 5.4x, significantly improving the financial position.
- Optimistic Future Outlook: The midpoint of 2026 normalized FFO guidance is set at $1.61 per share, with projected same-store cash NOI growth between 3.5% and 4.5%, as management expresses confidence in future growth potential, emphasizing continued focus on capital allocation and strategic growth.
See More
Healthcare Realty Declares Quarterly Dividend of $0.24
- Quarterly Dividend Declaration: Healthcare Realty has declared a quarterly dividend of $0.24 per share, consistent with previous distributions, demonstrating the company's ongoing ability to maintain stable cash flows, which is likely to attract income-seeking investors.
- Dividend Yield: The forward yield of 5.49% reflects the company's attractiveness in the current market environment, potentially increasing investor interest in its stock, especially in a low-interest-rate context.
- Shareholder Record Date: The dividend will be payable on March 11, with a record date of February 24 and an ex-dividend date also on February 24, providing investors with a clear timeline for their investment decisions.
- Management Change: Healthcare Realty has recently appointed a new CFO, indicating a strategic shift in management that may influence future financial decisions and shareholder value creation.
See More
H&R REIT Reports Q4 FFO and Dividend Declaration
- FFO Performance: H&R REIT reported a Q4 FFO of C$0.312 per basic and diluted unit, indicating financial stability amidst market challenges, showcasing the company's ability to maintain profitability.
- Rental Income Growth: The rental income from investment properties reached C$203.75 million this quarter, slightly up from C$202.35 million a year ago, reflecting the company's resilience in the leasing market and consistent cash inflow.
- Dividend Declaration: H&R REIT declared a dividend of C$0.05 per share, demonstrating its commitment to shareholder returns while indicating stable cash flow and profitability, which enhances investor confidence.
- Quant Rating Insights: Seeking Alpha's Quant Rating on H&R REIT highlights market attention on its financial health, as the company continues to attract investor interest despite economic uncertainties.
See More
Healthcare Realty Q4 Earnings Report Analysis
- Financial Performance: Healthcare Realty reported a Q4 FFO of $0.40, aligning with expectations, while revenue of $286.3 million, down 7.6% year-over-year, exceeded market estimates by $1.93 million, demonstrating resilience amid challenges.
- Future Outlook: The company projects 2026 earnings per share to range from -$0.71 to $0.05, with NAREIT FFO per share estimated between $1.38 and $1.50, indicating cautious optimism about future profitability despite ongoing challenges.
- Cash Flow Growth: Same-store cash NOI growth of 4.8% surpasses the 2025 forecast range of 3.5%-4.5%, reflecting the company's ability to maintain stable cash flows, which may bolster investor confidence.
- Management Changes: Healthcare Realty has appointed a new CFO, aiming to drive strategic transformation through new leadership, enhance financial transparency, and improve operational efficiency, thereby strengthening its competitive position in the market.
See More
Healthcare Realty Trust Launches $600 Million Commercial Paper Program
- Commercial Paper Program Launch: Healthcare Realty Trust has announced the establishment of its inaugural commercial paper program, allowing its operating partnership, Healthcare Realty Holdings, L.P., to issue up to $600 million in short-term, unsecured commercial paper notes to enhance liquidity and financial flexibility.
- Clear Use of Proceeds: The proceeds from the notes will be utilized for general corporate purposes, aimed at strengthening the company's capital structure and providing funding for future investments, thereby enhancing its competitive position in the market.
- Debt Structure Optimization: The newly issued commercial paper will rank pari passu with the Issuer's other senior unsecured indebtedness, indicating a robust strategy in debt management that helps reduce financing costs and optimize capital allocation.
- Compliance Statement: The commercial paper and its guarantees have not been registered under the Securities Act of 1933, highlighting the company's commitment to regulatory compliance while actively exploring diversified financing channels to adapt to market changes and business needs.
See More
Healthcare Realty to Announce Q4 Earnings on February 12
- Earnings Announcement: Healthcare Realty is set to announce its Q4 earnings on February 12, after market close, with consensus estimates predicting a funds from operations (FFO) of $0.40 and revenue of $284.37 million, providing investors with an updated view of the company's financial health.
- Market Expectations: The consensus FFO and revenue estimates reflect investor confidence in Healthcare Realty's ongoing profitability, even as the current market environment poses challenges for real estate investment trusts (REITs), with analysts maintaining a cautiously optimistic outlook on its future performance.
- New CFO Appointment: Healthcare Realty has recently appointed a new Chief Financial Officer (CFO), aimed at enhancing financial management and strategic planning capabilities, which is expected to bring fresh perspectives and leadership to help the company maintain its competitive edge in a challenging market.
- Historical Financial Review: Historical financial data for Healthcare Realty indicates stable performance over the past several quarters, and despite market fluctuations, the company's fundamentals remain solid, laying a strong foundation for the upcoming earnings report.
See More
Healthcare Realty Trust Q4 2025 Earnings Call Highlights
- Asset Management Upgrade: Healthcare Realty Trust completed the revamp of its asset management platform, resulting in a 60 basis point improvement in cash leasing spreads and a 220 basis point increase in tenant retention, demonstrating significant effectiveness in optimizing asset allocation and enhancing customer satisfaction.
- Strong Financial Performance: The company reported a normalized FFO per share of $0.40 for Q4 2025, with same-store cash NOI growth reaching 5.5%, and a full-year normalized FFO of $1.61, indicating sustained competitiveness and profitability in the market.
- Completion of Asset Disposition Plan: Successfully sold $1.2 billion in assets at a 6.7% cap rate, while reducing total debt by $900 million, leading to a decrease in leverage from 6.4x at the beginning of the year to 5.4x, significantly improving the financial position.
- Optimistic Future Outlook: The midpoint of 2026 normalized FFO guidance is set at $1.61 per share, with projected same-store cash NOI growth between 3.5% and 4.5%, as management expresses confidence in future growth potential, emphasizing continued focus on capital allocation and strategic growth.
See More
Healthcare Realty Declares Quarterly Dividend of $0.24
- Quarterly Dividend Declaration: Healthcare Realty has declared a quarterly dividend of $0.24 per share, consistent with previous distributions, demonstrating the company's ongoing ability to maintain stable cash flows, which is likely to attract income-seeking investors.
- Dividend Yield: The forward yield of 5.49% reflects the company's attractiveness in the current market environment, potentially increasing investor interest in its stock, especially in a low-interest-rate context.
- Shareholder Record Date: The dividend will be payable on March 11, with a record date of February 24 and an ex-dividend date also on February 24, providing investors with a clear timeline for their investment decisions.
- Management Change: Healthcare Realty has recently appointed a new CFO, indicating a strategic shift in management that may influence future financial decisions and shareholder value creation.
See More
H&R REIT Reports Q4 FFO and Dividend Declaration
- FFO Performance: H&R REIT reported a Q4 FFO of C$0.312 per basic and diluted unit, indicating financial stability amidst market challenges, showcasing the company's ability to maintain profitability.
- Rental Income Growth: The rental income from investment properties reached C$203.75 million this quarter, slightly up from C$202.35 million a year ago, reflecting the company's resilience in the leasing market and consistent cash inflow.
- Dividend Declaration: H&R REIT declared a dividend of C$0.05 per share, demonstrating its commitment to shareholder returns while indicating stable cash flow and profitability, which enhances investor confidence.
- Quant Rating Insights: Seeking Alpha's Quant Rating on H&R REIT highlights market attention on its financial health, as the company continues to attract investor interest despite economic uncertainties.
See More
Healthcare Realty Q4 Earnings Report Analysis
- Financial Performance: Healthcare Realty reported a Q4 FFO of $0.40, aligning with expectations, while revenue of $286.3 million, down 7.6% year-over-year, exceeded market estimates by $1.93 million, demonstrating resilience amid challenges.
- Future Outlook: The company projects 2026 earnings per share to range from -$0.71 to $0.05, with NAREIT FFO per share estimated between $1.38 and $1.50, indicating cautious optimism about future profitability despite ongoing challenges.
- Cash Flow Growth: Same-store cash NOI growth of 4.8% surpasses the 2025 forecast range of 3.5%-4.5%, reflecting the company's ability to maintain stable cash flows, which may bolster investor confidence.
- Management Changes: Healthcare Realty has appointed a new CFO, aiming to drive strategic transformation through new leadership, enhance financial transparency, and improve operational efficiency, thereby strengthening its competitive position in the market.
See More
Healthcare Realty Trust Launches $600 Million Commercial Paper Program
- Commercial Paper Program Launch: Healthcare Realty Trust has announced the establishment of its inaugural commercial paper program, allowing its operating partnership, Healthcare Realty Holdings, L.P., to issue up to $600 million in short-term, unsecured commercial paper notes to enhance liquidity and financial flexibility.
- Clear Use of Proceeds: The proceeds from the notes will be utilized for general corporate purposes, aimed at strengthening the company's capital structure and providing funding for future investments, thereby enhancing its competitive position in the market.
- Debt Structure Optimization: The newly issued commercial paper will rank pari passu with the Issuer's other senior unsecured indebtedness, indicating a robust strategy in debt management that helps reduce financing costs and optimize capital allocation.
- Compliance Statement: The commercial paper and its guarantees have not been registered under the Securities Act of 1933, highlighting the company's commitment to regulatory compliance while actively exploring diversified financing channels to adapt to market changes and business needs.
See More
Healthcare Realty to Announce Q4 Earnings on February 12
- Earnings Announcement: Healthcare Realty is set to announce its Q4 earnings on February 12, after market close, with consensus estimates predicting a funds from operations (FFO) of $0.40 and revenue of $284.37 million, providing investors with an updated view of the company's financial health.
- Market Expectations: The consensus FFO and revenue estimates reflect investor confidence in Healthcare Realty's ongoing profitability, even as the current market environment poses challenges for real estate investment trusts (REITs), with analysts maintaining a cautiously optimistic outlook on its future performance.
- New CFO Appointment: Healthcare Realty has recently appointed a new Chief Financial Officer (CFO), aimed at enhancing financial management and strategic planning capabilities, which is expected to bring fresh perspectives and leadership to help the company maintain its competitive edge in a challenging market.
- Historical Financial Review: Historical financial data for Healthcare Realty indicates stable performance over the past several quarters, and despite market fluctuations, the company's fundamentals remain solid, laying a strong foundation for the upcoming earnings report.
See More
