0001360604False00013606042023-11-032023-11-03
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 3, 2023 (November 3, 2023)
Healthcare Realty Trust Incorporated
(Exact name of registrant as specified in its charter) | | | | | | | | | | | | | | | | | | | | | | | |
| Maryland | (Healthcare Realty Trust Incorporated) | | 001-35568 | | 20-4738467 | |
(State or other jurisdiction of incorporation or organization) | | (Commission File Number) | | (I.R.S. Employer Identification No.) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
3310 West End Avenue, Suite 700 | Nashville, | Tennessee | 37203 | | | | (615) | 269-8175 | | | |
(Address of Principal Executive Office and Zip Code) | | | (Registrant’s telephone number, including area code) | | |
| | | | | | | |
| | |
www.healthcarerealty.com |
(Internet address) |
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | | | | | | | |
Title of each class | | Trading symbol(s) | | Name of each exchange on which registered |
Class A Common Stock, $0.01 par value per share | | HR | | New York Stock Exchange |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | | | | | |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter): | | | | | | | | |
Healthcare Realty Trust Incorporated | ☐ | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | | | | | | | | | | | |
Healthcare Realty Trust Incorporated | ☐ | | |
| | | | | |
Item 2.02 | Results of Operations and Financial Condition. |
Third Quarter Earnings Press Release
On November 3, 2023, Healthcare Realty Trust Incorporated (the “Company”) issued a press release announcing its earnings for the third quarter ended September 30, 2023. A copy of this press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference in its entirety.
| | | | | |
Item 7.01 | Regulation FD Disclosure |
Third Quarter Supplemental Information
The Company is furnishing its Supplemental Information for the third quarter ended September 30, 2023, which is also contained on its website (www.healthcarerealty.com). See Exhibit 99.2 to this Current Report on Form 8-K.
| | | | | |
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits. | | | | | |
99.1 | | |
99.2 | | |
104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. | | | | | | | | | | | |
|
| | | |
| Healthcare Realty Trust Incorporated | |
Date: November 3, 2023 | By: | /s/ J. Christopher Douglas | |
| | Name: J. Christopher Douglas | |
| | Title: Executive Vice President - Chief Financial Officer | |
Ron Hubbard
Vice President, Investor Relations
P: 615.269.8290
News Release
HEALTHCARE REALTY TRUST REPORTS RESULTS FOR THE THIRD QUARTER
NASHVILLE, Tennessee, November 3, 2023 - Healthcare Realty Trust Incorporated (NYSE:HR) today announced results for the third quarter ended September 30, 2023. The Company reported net loss attributable to common stockholders of $67.8 million, or $0.18 per diluted common share, for the quarter ended September 30, 2023. Normalized FFO for the three months ended September 30, 2023 totaled $148.1 million, or $0.39 per diluted common share.
The following applies to all same store disclosures reported in this press release. Subsequent to its merger with Healthcare Trust of America ("Legacy HTA") on July 20, 2022, the Company began reporting combined same store results in the third quarter of 2022, 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 all elements 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.
Salient quarterly highlights include:
•Normalized FFO per share totaled $0.39.
•Merger combined total same store cash NOI for the third quarter increased 2.3% over the prior year, and 2.8% for the trailing twelve months ended September 30, 2023.
•Predictive growth measures in the Merger Combined Same Store portfolio include:
◦Average in-place rent increases of 2.8%
◦Future annual contractual increases of 3.0% for leases commencing in the quarter.
◦Weighted average MOB cash leasing spreads of 4.8% on 622,000 square feet renewed:
▪1% (<0% spread)
▪3% (0-3%)
▪77% (3-4%)
▪19% (>4%)
◦Tenant retention of 76.1%
◦Year-over-year absorption of 56,000 square feet resulted in an average occupancy increase of 20 basis points to 89.2%.
•Portfolio leasing activity that commenced in the third quarter totaled 1,139,000 square feet related to 360 leases:
◦692,000 square feet of renewals
◦401,000 square feet of new and 46,000 square feet of expansion leases
| | | | | |
| HEALTHCAREREALTY.COM | PAGE 1 OF 7 |
•The Company executed new leases totaling 447,000 square feet in the quarter that will commence in future periods, an increase of 19% over the second quarter and 86% over the first quarter.
◦New leasing momentum for the legacy HTA properties was particularly strong, representing 62% of activity year-to-date, while comprising approximately one-half of the multi-tenant portfolio square footage.
•The multi-tenant leased percentage was 87.2% at September 30, which was 210 basis points greater than occupancy.
◦The multi-tenant Legacy HTA leased percentage was 85.2%, which was 250 basis points greater than occupancy.
•As of October 23, 2023, the pipeline of new leasing activity totaled 1.7 million square feet, which includes 16% in the lease documentation phase, 37% in the proposal and letter of intent phase, and 47% active prospects in the touring phase.
•During the third quarter, the Company sold five properties totaling $208.7 million and year-to-date has sold nine properties totaling $318.3 million. The Company expects to generate $138 million of proceeds from properties under contract that are expected to close by year-end. An additional $182 million of proceeds are expected to be generated from properties under letter of intent to sell with closings expected to be completed in fourth quarter 2023 and first quarter 2024.
•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. The Company's variable rate debt reduced from 14.6% to 13.0% of net debt as of June 30 and September 30, respectively. In October, the Company executed interest rate swaps totaling $200 million in anticipation of expiring interest rate swaps in January 2024.
•A dividend of $0.31 per share was paid in August. A dividend of $0.31 per share will be paid on November 30, 2023 to stockholders and OP unitholders of record on November 14, 2023.
•On Friday, November 3, 2023, at 12:00 p.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. Conference Call Access Details: Domestic Dial-In Number: +1 646-904-5544 access code 681379; All Other Locations: +1 833-470-1428 access code 681379. Replay Information: Domestic Dial-In Number: +1 929-458-6194 access code 207459; All Other Locations: +1 866-813-9403 access code 207459.
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 more than 700 properties totaling over 40 million square feet concentrated in 15 growth markets.
| | | | | |
| |
HEALTHCARE REALTY TRUST INCORPORATED | HEALTHCAREREALTY.COM | PAGE 2 OF 7 |
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; 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.
| | | | | |
| |
HEALTHCARE REALTY TRUST INCORPORATED | HEALTHCAREREALTY.COM | PAGE 3 OF 7 |
| | |
Consolidated Balance Sheets |
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | | | | | | | | | | | | | | | | |
ASSETS | | | | | |
| 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | 3Q 2022 |
Real estate properties | | | | | |
Land | $1,387,821 | | $1,424,453 | | $1,412,805 | | $1,439,798 | | $1,449,550 | |
Buildings and improvements | 11,004,195 | | 11,188,821 | | 11,196,297 | | 11,332,037 | | 11,439,797 | |
Lease intangibles | 890,273 | | 922,029 | | 929,008 | | 959,998 | | 968,914 | |
Personal property | 12,686 | | 12,615 | | 11,945 | | 11,907 | | 11,680 | |
Investment in financing receivables, net | 120,975 | | 121,315 | | 120,692 | | 120,236 | | 118,919 | |
Financing lease right-of-use assets | 82,613 | | 83,016 | | 83,420 | | 83,824 | | 79,950 | |
Construction in progress | 85,644 | | 53,311 | | 42,615 | | 35,560 | | 43,148 | |
Land held for development | 59,871 | | 78,411 | | 69,575 | | 74,265 | | 73,321 | |
Total real estate investments | 13,644,078 | | 13,883,971 | | 13,866,357 | | 14,057,625 | | 14,185,279 | |
Less accumulated depreciation and amortization | (2,093,952) | | (1,983,944) | | (1,810,093) | | (1,645,271) | | (1,468,736) | |
Total real estate investments, net | 11,550,126 | | 11,900,027 | | 12,056,264 | | 12,412,354 | | 12,716,543 | |
Cash and cash equivalents | 24,668 | | 35,904 | | 49,941 | | 60,961 | | 57,583 | |
| | | | | |
Assets held for sale, net | 57,638 | | 151 | | 3,579 | | 18,893 | | 185,074 | |
Operating lease right-of-use assets | 323,759 | | 333,224 | | 336,112 | | 336,983 | | 321,365 | |
Investments in unconsolidated joint ventures | 325,453 | | 327,245 | | 327,746 | | 327,248 | | 327,752 | |
Other assets, net and goodwill | 822,084 | | 797,796 | | 795,242 | | 693,192 | | 587,126 | |
Total assets | $13,103,728 | | $13,394,347 | | $13,568,884 | | $13,849,631 | | $14,195,443 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | |
| 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | 3Q 2022 |
Liabilities | | | | | |
Notes and bonds payable | $5,227,413 | | $5,340,272 | | $5,361,699 | | $5,351,827 | | $5,570,139 | |
Accounts payable and accrued liabilities | 204,947 | | 196,147 | | 155,210 | | 244,033 | | 231,018 | |
Liabilities of properties held for sale | 3,814 | | 222 | | 277 | | 437 | | 10,644 | |
Operating lease liabilities | 273,319 | | 278,479 | | 279,637 | | 279,895 | | 268,840 | |
Financing lease liabilities | 74,087 | | 73,629 | | 73,193 | | 72,939 | | 72,378 | |
Other liabilities | 211,365 | | 219,694 | | 232,029 | | 218,668 | | 203,398 | |
Total liabilities | 5,994,945 | | 6,108,443 | | 6,102,045 | | 6,167,799 | | 6,356,417 | |
| | | | | |
| | | | | |
Redeemable non-controlling interests | 3,195 | | 2,487 | | 2,000 | | 2,014 | | — | |
| | | | | |
Stockholders' equity | | | | | |
Preferred stock, $0.01 par value; 200,000 shares authorized | — | | — | | — | | — | | — | |
Common stock, $0.01 par value; 1,000,000 shares authorized | 3,809 | | 3,808 | | 3,808 | | 3,806 | | 3,806 | |
Additional paid-in capital | 9,597,629 | | 9,595,033 | | 9,591,194 | | 9,587,637 | | 9,586,556 | |
Accumulated other comprehensive income (loss) | 17,079 | | 9,328 | | (8,554) | | 2,140 | | 5,524 | |
Cumulative net income attributable to common stockholders | 1,069,327 | | 1,137,171 | | 1,219,930 | | 1,307,055 | | 1,342,819 | |
Cumulative dividends | (3,684,144) | | (3,565,941) | | (3,447,750) | | (3,329,562) | | (3,211,492) | |
Total stockholders' equity | 7,003,700 | | 7,179,399 | | 7,358,628 | | 7,571,076 | | 7,727,213 | |
Non-controlling interest | 101,888 | | 104,018 | | 106,211 | | 108,742 | | 111,813 | |
Total Equity | 7,105,588 | | 7,283,417 | | 7,464,839 | | 7,679,818 | | 7,839,026 | |
Total liabilities and stockholders' equity | $13,103,728 | | $13,394,347 | | $13,568,884 | | $13,849,631 | | $14,195,443 | |
| | | | | |
| |
HEALTHCARE REALTY TRUST INCORPORATED | HEALTHCAREREALTY.COM | PAGE 4 OF 7 |
| | |
Consolidated Statements of Income |
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | | | | | | | | |
Revenues | | | | | | | | | | | | |
Rental income | $333,335 | $329,680 | $324,093 | $329,399 | | | | | | | | |
Interest income | 4,264 | 4,233 | 4,214 | 4,227 | | | | | | | | |
Other operating | 4,661 | 4,230 | 4,618 | 4,436 | | | | | | | | |
| 342,260 | 338,143 | 332,925 | 338,062 | | | | | | | | |
Expenses | | | | | | | | | | | | |
Property operating | 131,639 | 125,395 | 122,040 | 117,009 | | | | | | | | |
General and administrative | 13,396 | 15,464 | 14,935 | 14,417 | | | | | | | | |
Acquisition and pursuit costs 1 | 769 | 669 | 287 | 92 | | | | | | | | |
Merger-related costs | 7,450 | (15,670) | 4,855 | 10,777 | | | | | | | | |
Depreciation and amortization | 182,989 | 183,193 | 184,479 | 185,275 | | | | | | | | |
| 336,243 | 309,051 | 326,596 | 327,570 | | | | | | | | |
Other income (expense) | | | | | | | | | | | | |
Interest expense before merger-related fair value | (55,637) | (54,780) | (52,895) | (52,464) | | | | | | | | |
Merger-related fair value adjustment | (10,667) | (10,554) | (10,864) | (11,979) | | | | | | | | |
Interest expense | (66,304) | (65,334) | (63,759) | (64,443) | | | | | | | | |
Gain on sales of real estate properties | 48,811 | 7,156 | 1,007 | 73,083 | | | | | | | | |
Gain on extinguishment of debt | 62 | — | — | 119 | | | | | | | | |
Impairment of real estate assets and credit loss reserves | (56,873) | (55,215) | (31,422) | (54,452) | | | | | | | | |
Equity(loss) gain from unconsolidated joint ventures | (456) | (17) | (780) | 89 | | | | | | | | |
Interest and other income (expense), net | 139 | 592 | 547 | (1,168) | | | | | | | | |
| (74,621) | (112,818) | (94,407) | (46,772) | | | | | | | | |
Net loss | $(68,604) | $(83,726) | $(88,078) | $(36,280) | | | | | | | | |
Net loss attributable to non-controlling interests | 760 | 967 | 953 | 516 | | | | | | | | |
Net loss attributable to common stockholders | $(67,844) | $(82,759) | $(87,125) | $(35,764) | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Basic earnings per common share | $(0.18) | $(0.22) | $(0.23) | $(0.10) | | | | | | | | |
Diluted earnings per common share | $(0.18) | $(0.22) | $(0.23) | $(0.10) | | | | | | | | |
| | | | | | | | | | | | |
Weighted average common shares outstanding - basic | 378,925 | 378,897 | 378,840 | 378,617 | | | | | | | | |
Weighted average common shares outstanding - diluted 2 | 378,925 | 378,897 | 378,840 | 378,617 | | | | | | | | |
1Includes third party and travel costs related to the pursuit of acquisitions and developments.
2Potential common shares are not included in the computation of diluted earnings per share when a loss exists, as the effect would be an antidilutive per share amount. As a result, the Company's OP totaling 4,042,993 units was not included.
| | | | | |
| |
HEALTHCARE REALTY TRUST INCORPORATED | HEALTHCAREREALTY.COM | PAGE 5 OF 7 |
| | |
Reconciliation of FFO, Normalized FFO and FAD 1,2,3 |
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | | | | | | | | | | | | | | | | | |
Net loss attributable to common stockholders | $(67,844) | $(82,759) | $(87,125) | $(35,764) | | | | | | | | | | | | | | | | | |
Net loss attributable to common stockholders per diluted share 3 | $(0.18) | $(0.22) | $(0.23) | $(0.10) | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Gain on sales of real estate assets | (48,811) | | (7,156) | | (1,007) | | (73,083) | | | | | | | | | | | | | | | | | | |
Impairments of real estate assets | 56,873 | | 55,215 | | 26,227 | | 54,452 | | | | | | | | | | | | | | | | | | |
Real estate depreciation and amortization | 185,143 | | 185,003 | | 186,109 | | 186,658 | | | | | | | | | | | | | | | | | | |
Non-controlling loss from partnership units | (841) | | (1,027) | | (1,067) | | (382) | | | | | | | | | | | | | | | | | | |
Unconsolidated JV depreciation and amortization | 4,421 | 4,412 | 4,841 | 4,020 | | | | | | | | | | | | | | | | | |
FFO adjustments | $196,785 | $236,447 | $215,103 | $171,665 | | | | | | | | | | | | | | | | | |
FFO adjustments per common share - diluted | $0.51 | $0.62 | $0.56 | $0.45 | | | | | | | | | | | | | | | | | |
FFO | $128,941 | $153,688 | $127,978 | $135,901 | | | | | | | | | | | | | | | | | |
FFO per common share - diluted | $0.34 | $0.40 | $0.33 | $0.35 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Acquisition and pursuit costs | 769 | 669 | 287 | 92 | | | | | | | | | | | | | | | | | |
Merger-related costs | 7,450 | (15,670) | 4,855 | 10,777 | | | | | | | | | | | | | | | | | |
Lease intangible amortization | 213 | 240 | 146 | 137 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Non-routine legal costs/forfeited earnest money received | — | 275 | — | 194 | | | | | | | | | | | | | | | | | |
Debt financing costs | (62) | — | — | 625 | | | | | | | | | | | | | | | | | |
Allowance for credit losses 4 | — | — | 8,599 | — | | | | | | | | | | | | | | | | | |
Merger-related fair value adjustment | 10,667 | 10,554 | 10,864 | 11,979 | | | | | | | | | | | | | | | | | |
Unconsolidated JV normalizing items 5 | 90 | 93 | 117 | 96 | | | | | | | | | | | | | | | | | |
Normalized FFO adjustments | $19,127 | $(3,839) | $24,868 | $23,900 | | | | | | | | | | | | | | | | | |
Normalized FFO adjustments per common share - diluted | $0.05 | $(0.01) | $0.06 | $0.06 | | | | | | | | | | | | | | | | | |
Normalized FFO | $148,068 | $149,849 | $152,846 | $159,801 | | | | | | | | | | | | | | | | | |
Normalized FFO per common share - diluted | $0.39 | $0.39 | $0.40 | $0.42 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Non-real estate depreciation and amortization | 475 | 802 | 604 | 624 | | | | | | | | | | | | | | | | | |
Non-cash interest amortization, net 6 | 1,402 | 1,618 | 682 | 2,284 | | | | | | | | | | | | | | | | | |
Rent reserves, net | 442 | (54) | 1,371 | (100) | | | | | | | | | | | | | | | | | |
Straight-line rent income, net | (8,470) | (8,005) | (8,246) | (9,873) | | | | | | | | | | | | | | | | | |
Stock-based compensation | 2,556 | 3,924 | 3,745 | 3,573 | | | | | | | | | | | | | | | | | |
Unconsolidated JV non-cash items 7 | (231) | (316) | (227) | (316) | | | | | | | | | | | | | | | | | |
Normalized FFO adjusted for non-cash items | 144,242 | 147,818 | 150,775 | 155,993 | | | | | | | | | | | | | | | | | |
2nd generation TI | (21,248) | (17,236) | (8,882) | (13,523) | | | | | | | | | | | | | | | | | |
Leasing commissions paid | (8,907) | (5,493) | (7,013) | (7,404) | | | | | | | | | | | | | | | | | |
Capital expenditures | (14,354) | (8,649) | (8,946) | (25,669) | | | | | | | | | | | | | | | | | |
Total maintenance capex | (44,509) | (31,378) | (24,841) | (46,596) | | | | | | | | | | | | | | | | | |
FAD | $99,733 | $116,440 | $125,934 | $109,397 | | | | | | | | | | | | | | | | | |
Quarterly dividends | $119,456 | $119,444 | $119,442 | $119,323 | | | | | | | | | | | | | | | | | |
FFO wtd avg common shares outstanding - diluted 8 | 383,428 | 383,409 | 383,335 | 383,228 | | | | | | | | | | | | | | | | | |
1Funds from operations (“FFO”) and FFO per share are operating performance measures adopted by NAREIT. NAREIT defines FFO as “net income (computed in accordance with GAAP) excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.”
2FFO, Normalized FFO and Funds Available for Distribution ("FAD") do not represent cash generated from operating activities determined in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs. FFO, Normalized FFO and FAD should not be considered alternatives to net income attributable to common stockholders as indicators of the Company's operating performance or as alternatives to cash flow as measures of liquidity.
3Potential common shares are not included in the computation of diluted earnings per share when a loss exists, as the effect would be an antidilutive per share amount.
4In Q1 2023, allowance for credit losses included a $5.2 million credit allowance for a mezzanine loan included in "Impairment of real estate and credit loss reserves" on the Statement of Income and $3.4 million reserve included in “Rental Income” on the Statement of Income for previously deferred rent and straight line rent for three skilled nursing facilities.
5Includes the Company's proportionate share of normalizing items related to unconsolidated joint ventures such as lease intangibles and acquisition and pursuit costs.
6Includes the amortization of deferred financing costs, discounts and premiums, and non-cash financing receivable amortization.
7Includes the Company's proportionate share of straight-line rent, net and rent reserves, net related to unconsolidated joint ventures.
8The Company utilizes the treasury stock method, which includes the dilutive effect of nonvested share-based awards outstanding of 432,597 for the three months ended September 30, 2023. Also includes the diluted impact of 4,042,993 OP units outstanding.
| | | | | |
| |
HEALTHCARE REALTY TRUST INCORPORATED | HEALTHCAREREALTY.COM | PAGE 6 OF 7 |
| | |
Reconciliation of Non-GAAP Measures |
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA - UNAUDITED |
|
Management considers funds from operations ("FFO"), FFO per share, normalized FFO, normalized FFO per share, funds available for distribution ("FAD") to be useful non-GAAP measures of the Company's operating performance. A non-GAAP financial measure is generally defined as one that purports to measure historical financial performance, financial position or cash flows, but excludes or includes amounts that would not be so adjusted in the most comparable measure determined in accordance with GAAP. Set forth below are descriptions of the non-GAAP financial measures management considers relevant to the Company's business and useful to investors.
The non-GAAP financial measures presented herein are not necessarily identical to those presented by other real estate companies due to the fact that not all real estate companies use the same definitions. These measures should not be considered as alternatives to net income (determined in accordance with GAAP), as indicators of the Company's financial performance, or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of the Company's liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of the Company's needs.
FFO and FFO per share are operating performance measures adopted by the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”). NAREIT defines FFO as “net income (computed in accordance with GAAP) excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.” The Company defines Normalized FFO as FFO excluding acquisition-related expenses, lease intangible amortization and other normalizing items that are unusual and infrequent in nature. FAD is presented by adding to Normalized FFO non-real estate depreciation and amortization, deferred financing fees amortization, share-based compensation expense and rent reserves, net; and subtracting maintenance capital expenditures, including second generation tenant improvements and leasing commissions paid and straight-line rent income, net of expense. The Company's definition of these terms may not be comparable to that of other real estate companies as they may have different methodologies for computing these amounts. FFO, Normalized FFO and FAD do not represent cash generated from operating activities determined in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs. FFO, Normalized FFO and FAD should not be considered an alternative to net income as an indicator of the Company’s operating performance or as an alternative to cash flow as a measure of liquidity. FFO, Normalized FFO and FAD should be reviewed in connection with GAAP financial measures.
Management believes FFO, FFO per share, Normalized FFO, Normalized FFO per share, and FAD provide an understanding of the operating performance of the Company’s properties without giving effect to certain significant non-cash items, including depreciation and amortization expense. Historical cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time. However, real estate values instead have historically risen or fallen with market conditions. The Company believes that by excluding the effect of depreciation, amortization, gains or losses from sales of real estate, and other normalizing items that are unusual and infrequent, FFO, FFO per share, Normalized FFO, Normalized FFO per share and FAD can facilitate comparisons of operating performance between periods. The Company reports these measures because they have been observed by management to be the predominant measures used by the REIT industry and by industry analysts to evaluate REITs and because these measures are consistently reported, discussed, and compared by research analysts in their notes and publications about REITs.
Merger Combined Cash NOI and Merger Combined Same Store Cash NOI are key performance indicators. Management considers these to be supplemental measures that allow investors, analysts and Company management to measure unlevered property-level operating results. The Company defines Merger Combined Cash NOI as rental income and less property operating expenses. Merger Combined Cash NOI excludes non-cash items such as above and below market lease intangibles, straight-line rent, lease inducements, lease termination fees, tenant improvement amortization and leasing commission amortization. Merger Combined Cash NOI is historical and not necessarily indicative of future results.
Merger Combined Same Store Cash NOI compares Merger Combined Cash NOI for stabilized properties. Stabilized properties are properties that have been included in operations for the duration of the year-over-year comparison period presented. Accordingly, stabilized properties exclude properties that were recently acquired or disposed of, properties classified as held for sale, properties undergoing redevelopment, and newly redeveloped or developed properties.
The Company utilizes the redevelopment classification for properties where management has approved a change in strategic direction for such properties through the application of additional resources including an amount of capital expenditures significantly above routine maintenance and capital improvement expenditures. These properties are described in additional detail in Footnote 6 to the Condensed Consolidated Financial Statements.
Any recently acquired property will be included in the same store pool once the Company has owned the property for eight full quarters. Newly developed or redeveloped properties will be included in the same store pool eight full quarters after substantial completion.
| | | | | |
| |
HEALTHCARE REALTY TRUST INCORPORATED | HEALTHCAREREALTY.COM | PAGE 7 OF 7 |
| | |
3Q2023 |
Supplemental Information |
FURNISHED AS OF NOVEMBER 3, 2023 - UNAUDITED |
|
|
| | |
FORWARD LOOKING STATEMENTS & RISK FACTORS |
|
This Supplemental Information report contains disclosures that are “forward-looking statements” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words and phrases such as “can,” “may,” “payable,” “indicative,” "predictive," “annualized,” “expect,” “expected,” “range of expectations,” "would have been," "budget," and other comparable terms in this report, and include, but are not limited to, statements related to the merger between Healthcare Realty Trust Incorporated (“Legacy HR” and, after the closing of the merger, the “Company” or "HR") and Healthcare Trust of America, Inc. (“HTA”) that closed on July 20, 2022 (the “Merger”). These forward-looking statements are made as of the date of this report and are not necessarily indicative of future performance. These statements are based on the current plans and expectations of Company management and are subject to a number of unknown risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from those described in this release or implied by such forward-looking statements. Such risks and uncertainties include, among other things, the following: the Company’s expected results may not be achieved; failure to realize the expected benefits of the Merger; the risk that the Company’s and HTA’s respective businesses 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; pandemics or other health crises, such as COVID-19; increases in interest rates; the availability and cost of capital at expected rates; competition for quality assets; negative developments in the operating results or financial condition of the Company's tenants, including, but not limited to, their ability to pay rent; the Company's ability to reposition or sell facilities with profitable results; the Company's ability to release space at similar rates as vacancies occur; the Company's ability to renew expiring leases; government regulations affecting tenants' Medicare and Medicaid reimbursement rates and operational requirements; unanticipated difficulties and/or expenditures relating to future acquisitions and developments; changes in rules or practices governing the Company's financial reporting; the Company may be required under purchase options to sell properties and may not be able to reinvest the proceeds from such sales at rates of return equal to the return received on the properties sold; uninsured or underinsured losses related to casualty or liability; the incurrence of impairment charges on its real estate properties or other assets; and other legal and operational matters. Other risks, uncertainties and factors that could cause actual results to differ materially from those projected are detailed under the heading “Risk Factors,” in the Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) for the year ended December 31, 2022, under the heading "Risk Factors" and other risks described from time to time thereafter in the Company's SEC filings. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
| | | | | |
| Highlights |
| Salient Facts |
| Corporate Information |
| Balance Sheet |
| Statements of Income |
| FFO, Normalized FFO, & FAD |
| Capital Funding & Commitments |
| Debt Metrics |
| Debt Covenants & Liquidity |
| Investment Activity |
| Re/development Activity |
| Portfolio |
| Health Systems |
| MOB Proximity to Hospital |
| Lease Maturity & Occupancy |
| Leasing Statistics |
| Merger Combined Same Store |
| NOI Reconciliations |
| EBITDA Reconciliations |
| Components of Net Asset Value |
| Components of Expected FFO |
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 3 |
The following applies to all same store disclosures reported in this supplemental report. Subsequent to its merger with Healthcare Trust of America ("Legacy HTA") on July 20, 2022, the Company began reporting combined same store results in the third quarter of 2022, 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 all elements 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.
•Net loss attributable to common stockholders for the three months ended September 30, 2023 was $67.8 million or $0.18 per diluted common share.
•Normalized FFO per share totaled $0.39.
•Merger combined total same store cash NOI for the third quarter increased 2.3% over the prior year, and 2.8% for the trailing twelve months ended September 30, 2023.
•Predictive growth measures in the Merger Combined Same Store portfolio include:
◦Average in-place rent increases of 2.8%
◦Future annual contractual increases of 3.0% for leases commencing in the quarter.
◦Weighted average MOB cash leasing spreads of 4.8% on 622,000 square feet renewed:
▪1% (<0% spread)
▪3% (0-3%)
▪77% (3-4%)
▪19% (>4%)
◦Tenant retention of 76.1%
◦Year-over-year absorption of 56,000 square feet resulted in an average occupancy increase of 20 basis points to 89.2%.
•Portfolio leasing activity that commenced in the third quarter totaled 1,139,000 square feet related to 360 leases:
◦692,000 square feet of renewals
◦401,000 square feet of new and 46,000 square feet of expansion leases
•The Company executed new leases totaling 447,000 square feet in the quarter that will commence in future periods, an increase of 19% over the second quarter and 86% over the first quarter.
◦New leasing momentum for the legacy HTA properties was particularly strong, representing 62% of activity year-to-date, while comprising approximately one-half of the multi-tenant portfolio square footage.
•The multi-tenant leased percentage was 87.2% at September 30, which was 210 basis points greater than occupancy.
◦The multi-tenant Legacy HTA leased percentage was 85.2%, which was 250 basis points greater than occupancy.
•As of October 23, 2023, the pipeline of new leasing activity totaled 1.7 million square feet, which includes 16% in the lease documentation phase, 37% in the proposal and letter of intent phase, and 47% active prospects in the touring phase.
•During the third quarter, the Company sold five properties totaling $208.7 million and year-to-date has sold nine properties totaling $318.3 million. The Company expects to generate $138 million of proceeds from properties under contract that are expected to close by year-end. An additional $182 million of proceeds are expected to be generated from properties under letter of intent to sell with closings expected to be completed in fourth quarter 2023 and first quarter 2024.
•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. The Company's variable rate debt reduced from 14.6% to 13.0% of net debt as of June 30 and September 30, respectively. In October, the Company executed interest rate swaps totaling $200 million in anticipation of expiring interest rate swaps in January 2024.
•A dividend of $0.31 per share was paid in August. A dividend of $0.31 per share will be paid on November 30, 2023 to stockholders and OP unitholders of record on November 14, 2023.
•On Friday, November 3, 2023, at 12:00 p.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. Conference Call Access Details: Domestic Dial-In Number: +1 646-904-5544 access code 681379; All Other Locations: +1 833-470-1428 access code 681379. Replay Information: Domestic Dial-In Number: +1 929-458-6194 access code 207459; All Other Locations: +1 866-813-9403 access code 207459.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 4 |
| | |
Salient Facts 1 |
AS OF SEPTEMBER 30, 2023 |
| | | | | | | | | | | |
| Properties | | |
| | |
| 697 properties totaling 41.0M SF | |
| 73 markets in 35 states | |
| 93% managed by Healthcare Realty | |
| 92% outpatient medical facilities | |
| 60% of NOI in Top 15 Markets | |
| | |
| | |
| Capitalization | |
| | |
| $11.4B enterprise value as of 9/30/23 | |
| $5.9B market capitalization as of 9/30/23 | |
| 384.9M shares outstanding (including OP units) | |
| $0.31 quarterly dividend per share | |
| BBB/Baa2 S&P/Moody's | |
| 48.3% net debt to enterprise value at 9/30/23 | |
| 6.6x net debt to adjusted EBITDA | |
| | |
1 Includes properties held in joint ventures.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 5 |
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 of September 30, 2023, the Company was invested in 697 real estate properties in 35 states totaling 41.0 million square feet and had an enterprise value of approximately $11.4 billion, defined as equity market capitalization plus the principal amount of debt less cash. The Company provided leasing and property management services to 93% of its portfolio.
| | |
EXECUTIVE OFFICERS |
|
Todd J. Meredith |
President and Chief Executive Officer |
|
John M. Bryant, Jr. |
Executive Vice President and General Counsel |
|
J. Christopher Douglas |
Executive Vice President and Chief Financial Officer |
|
Robert E. Hull |
Executive Vice President - Investments |
|
Julie F. Wilson |
Executive Vice President - Operations |
|
|
|
|
|
|
|
| | | | | |
| ANALYST COVERAGE |
| |
| BMO Capital Markets |
| BTIG, LLC |
| Citi Research |
| Green Street Advisors, Inc. |
| J.P. Morgan Securities LLC |
| Jefferies LLC |
| KeyBanc Capital Markets Inc. |
| Raymond James & Associates |
| Scotiabank |
| Stifel, Nicolaus & Company, Inc. |
| Wedbush Securities |
| Wells Fargo Securities, LLC |
| |
| |
J. Knox Singleton
Chairman, Healthcare Realty Trust Incorporated
Retired Chief Executive Officer, Inova Health System
W. Bradley Blair, II
Vice Chairman, Healthcare Realty Trust Incorporated
Retired Chairman, Healthcare Trust of America
Todd J. Meredith
President and Chief Executive Officer
Healthcare Realty Trust Incorporated
John V. Abbott
Retired Chief Executive Officer
Aviation Asset Management Group, General Electric Company
Nancy H. Agee
President and Chief Executive Officer
Carilion Clinic
Vicki U. Booth
President and Board Chair
Ueberroth Family Foundation
Edward H. Braman
Retired Audit Partner
Ernst & Young LLP
Ajay Gupta
Chief Executive Officer
Physician Rehabilitation Network
James J. Kilroy
President and Portfolio Manager
Willis Investment Counsel
Jay P. Leupp
Managing Partner and Senior Portfolio Manager
Terra Firma Asset Management, LLC
Peter F. Lyle
Executive Vice President
Medical Management Associates, Inc.
Constance B. Moore
Retired President and CEO
BRE Properties, Inc.
Christann M. Vasquez
Retired Executive Vice President and Chief Operating Officer
Ascension Texas
David R. Emery (1944-2019)
Chairman Emeritus
Healthcare Realty Trust Incorporated
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 6 |
| | |
Balance Sheet |
AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA |
|
| | | | | | | | | | | | | | | | | | |
ASSETS | | | | | | |
| | | | |
| 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | 3Q 2022 | |
Real estate properties | | | | | | |
Land | $1,387,821 | | $1,424,453 | | $1,412,805 | | $1,439,798 | | $1,449,550 | | |
Buildings and improvements | 11,004,195 | | 11,188,821 | | 11,196,297 | | 11,332,037 | | 11,439,797 | | |
Lease intangibles | 890,273 | | 922,029 | | 929,008 | | 959,998 | | 968,914 | | |
Personal property | 12,686 | | 12,615 | | 11,945 | | 11,907 | | 11,680 | | |
Investment in financing receivables, net | 120,975 | | 121,315 | | 120,692 | | 120,236 | | 118,919 | | |
Financing lease right-of-use assets | 82,613 | | 83,016 | | 83,420 | | 83,824 | | 79,950 | | |
Construction in progress | 85,644 | | 53,311 | | 42,615 | | 35,560 | | 43,148 | | |
Land held for development | 59,871 | | 78,411 | | 69,575 | | 74,265 | | 73,321 | | |
Total real estate investments | 13,644,078 | | 13,883,971 | | 13,866,357 | | 14,057,625 | | 14,185,279 | | |
Less accumulated depreciation and amortization | (2,093,952) | | (1,983,944) | | (1,810,093) | | (1,645,271) | | (1,468,736) | | |
Total real estate investments, net | 11,550,126 | | 11,900,027 | | 12,056,264 | | 12,412,354 | | 12,716,543 | | |
Cash and cash equivalents | 24,668 | | 35,904 | | 49,941 | | 60,961 | | 57,583 | | |
| | | | | | |
Assets held for sale, net | 57,638 | | 151 | | 3,579 | | 18,893 | | 185,074 | | |
Operating lease right-of-use assets | 323,759 | | 333,224 | | 336,112 | | 336,983 | | 321,365 | | |
Investments in unconsolidated joint ventures | 325,453 | | 327,245 | | 327,746 | | 327,248 | | 327,752 | | |
Other assets, net and goodwill | 822,084 | | 797,796 | | 795,242 | | 693,192 | | 587,126 | | |
Total assets | $13,103,728 | | $13,394,347 | | $13,568,884 | | $13,849,631 | | $14,195,443 | | |
| | | | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | |
| | | | |
| 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | 3Q 2022 | |
Liabilities | | | | | | |
Notes and bonds payable | $5,227,413 | | $5,340,272 | | $5,361,699 | | $5,351,827 | | $5,570,139 | | |
Accounts payable and accrued liabilities | 204,947 | | 196,147 | | 155,210 | | 244,033 | | 231,018 | | |
Liabilities of properties held for sale | 3,814 | | 222 | | 277 | | 437 | | 10,644 | | |
Operating lease liabilities | 273,319 | | 278,479 | | 279,637 | | 279,895 | | 268,840 | | |
Financing lease liabilities | 74,087 | | 73,629 | | 73,193 | | 72,939 | | 72,378 | | |
Other liabilities | 211,365 | | 219,694 | | 232,029 | | 218,668 | | 203,398 | | |
Total liabilities | 5,994,945 | | 6,108,443 | | 6,102,045 | | 6,167,799 | | 6,356,417 | | |
| | | | | | |
| | | | | | |
Redeemable non-controlling interests | 3,195 | | 2,487 | | 2,000 | | 2,014 | | — | | |
| | | | | | |
Stockholders' equity | | | | | | |
Preferred stock, $0.01 par value; 200,000 shares authorized | — | | — | | — | | — | | — | | |
Common stock, $0.01 par value; 1,000,000 shares authorized | 3,809 | | 3,808 | | 3,808 | | 3,806 | | 3,806 | | |
Additional paid-in capital | 9,597,629 | | 9,595,033 | | 9,591,194 | | 9,587,637 | | 9,586,556 | | |
Accumulated other comprehensive income (loss) | 17,079 | | 9,328 | | (8,554) | | 2,140 | | 5,524 | | |
Cumulative net income attributable to common stockholders | 1,069,327 | | 1,137,171 | | 1,219,930 | | 1,307,055 | | 1,342,819 | | |
Cumulative dividends | (3,684,144) | | (3,565,941) | | (3,447,750) | | (3,329,562) | | (3,211,492) | | |
Total stockholders' equity | 7,003,700 | | 7,179,399 | | 7,358,628 | | 7,571,076 | | 7,727,213 | | |
Non-controlling interest | 101,888 | | 104,018 | | 106,211 | | 108,742 | | 111,813 | | |
Total equity | 7,105,588 | | 7,283,417 | | 7,464,839 | | 7,679,818 | | 7,839,026 | | |
Total liabilities and stockholders' equity | $13,103,728 | | $13,394,347 | $13,568,884 | $13,849,631 | $14,195,443 | |
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 7 |
| | |
Statements of Income |
DOLLARS IN THOUSANDS |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | | | | | | | | | | | |
Revenues | | | | | | | | | | | | | | | |
Rental income | $333,335 | $329,680 | $324,093 | $329,399 | | | | | | | | | | | |
Interest income | 4,264 | 4,233 | 4,214 | 4,227 | | | | | | | | | | | |
Other operating | 4,661 | 4,230 | 4,618 | 4,436 | | | | | | | | | | | |
| 342,260 | 338,143 | 332,925 | 338,062 | | | | | | | | | | | |
Expenses | | | | | | | | | | | | | | | |
Property operating | 131,639 | 125,395 | 122,040 | 117,009 | | | | | | | | | | | |
General and administrative | 13,396 | 15,464 | 14,935 | 14,417 | | | | | | | | | | | |
Acquisition and pursuit costs 1 | 769 | 669 | 287 | 92 | | | | | | | | | | | |
Merger-related costs | 7,450 | (15,670) | 4,855 | 10,777 | | | | | | | | | | | |
Depreciation and amortization | 182,989 | 183,193 | 184,479 | 185,275 | | | | | | | | | | | |
| 336,243 | 309,051 | 326,596 | 327,570 | | | | | | | | | | | |
Other income (expense) | | | | | | | | | | | | | | | |
Interest expense before merger-related fair value | (55,637) | (54,780) | (52,895) | (52,464) | | | | | | | | | | | |
Merger-related fair value adjustment | (10,667) | (10,554) | (10,864) | (11,979) | | | | | | | | | | | |
Interest expense | (66,304) | (65,334) | (63,759) | (64,443) | | | | | | | | | | | |
Gain on sales of real estate properties | 48,811 | 7,156 | 1,007 | 73,083 | | | | | | | | | | | |
Gain on extinguishment of debt | 62 | — | — | 119 | | | | | | | | | | | |
Impairment of real estate assets and credit loss reserves | (56,873) | (55,215) | (31,422) | (54,452) | | | | | | | | | | | |
Equity (loss) gain from unconsolidated joint ventures | (456) | (17) | (780) | 89 | | | | | | | | | | | |
Interest and other income (expense), net | 139 | 592 | 547 | (1,168) | | | | | | | | | | | |
| (74,621) | (112,818) | (94,407) | (46,772) | | | | | | | | | | | |
Net loss | $(68,604) | $(83,726) | $(88,078) | $(36,280) | | | | | | | | | | | |
Net loss attributable to non-controlling interests | 760 | 967 | 953 | 516 | | | | | | | | | | | |
Net loss attributable to common stockholders | $(67,844) | $(82,759) | $(87,125) | $(35,764) | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Basic earnings per common share | $(0.18) | $(0.22) | $(0.23) | $(0.10) | | | | | | | | | | | |
Diluted earnings per common share | $(0.18) | $(0.22) | $(0.23) | $(0.10) | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Weighted average common shares outstanding - basic | 378,925 | 378,897 | 378,840 | 378,617 | | | | | | | | | | | |
Weighted average common shares outstanding - diluted 2 | 378,925 | 378,897 | 378,840 | 378,617 | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
STATEMENTS OF INCOME SUPPLEMENTAL INFORMATION | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | | | | | | | | | | | |
Interest income | | | | | | | | | | | | | | | |
Financing receivables | $2,002 | $2,053 | $2,144 | $2,203 | | | | | | | | | | | |
Interest on mortgage and mezzanine loans | 2,262 | 2,180 | 2,070 | 2,024 | | | | | | | | | | | |
Total | $4,264 | $4,233 | $4,214 | $4,227 | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Other operating income | | | | | | | | | | | | | | | |
Parking income | $2,751 | $2,370 | $2,391 | $2,413 | | | | | | | | | | | |
Management fee income | 1,552 | 1,597 | 1,973 | 1,803 | | | | | | | | | | | |
Miscellaneous | 358 | 263 | 254 | 220 | | | | | | | | | | | |
Total | $4,661 | $4,230 | $4,618 | $4,436 | | | | | | | | | | | |
1Includes third party and travel costs related to the pursuit of acquisitions and developments.
2Potential common shares are not included in the computation of diluted earnings per share when a loss exists, as the effect would be an antidilutive per share amount. As a result, the Company's OP totaling 4,042,993 units was not included.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 8 |
| | |
FFO, Normalized FFO, & FAD 1,2,3 |
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | | | | | | | | | | | | | | | |
Net loss attributable to common stockholders | $(67,844) | $(82,759) | $(87,125) | $(35,764) | | | | | | | | | | | | | | | |
Net loss attributable to common stockholders per diluted share 3 | $(0.18) | $(0.22) | $(0.23) | $(0.10) | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Gain on sales of real estate assets | $(48,811) | $(7,156) | $(1,007) | (73,083) | | | | | | | | | | | | | | | | |
Impairments of real estate assets | 56,873 | | 55,215 | | 26,227 | | 54,452 | | | | | | | | | | | | | | | | |
Real estate depreciation and amortization | 185,143 | | 185,003 | | 186,109 | | 186,658 | | | | | | | | | | | | | | | | |
Non-controlling loss from partnership units | (841) | | (1,027) | | (1,067) | | (382) | | | | | | | | | | | | | | | | |
Unconsolidated JV depreciation and amortization | 4,421 | 4,412 | 4,841 | 4,020 | | | | | | | | | | | | | | | |
FFO adjustments | $196,785 | $236,447 | $215,103 | $171,665 | | | | | | | | | | | | | | | |
FFO adjustments per common share - diluted | $0.51 | $0.62 | $0.56 | $0.45 | | | | | | | | | | | | | | | |
FFO | $128,941 | $153,688 | $127,978 | $135,901 | | | | | | | | | | | | | | | |
FFO per common share - diluted | $0.34 | $0.40 | $0.33 | $0.35 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Acquisition and pursuit costs | 769 | 669 | 287 | 92 | | | | | | | | | | | | | | | |
Merger-related costs | 7,450 | (15,670) | 4,855 | 10,777 | | | | | | | | | | | | | | | |
Lease intangible amortization | 213 | | 240 | 146 | 137 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Non-routine legal costs/forfeited earnest money received | — | 275 | — | 194 | | | | | | | | | | | | | | | |
Debt financing costs | (62) | — | — | 625 | | | | | | | | | | | | | | | |
Allowance for credit losses 4 | — | — | 8,599 | — | | | | | | | | | | | | | | | |
Merger-related fair value adjustment | 10,667 | 10,554 | 10,864 | 11,979 | | | | | | | | | | | | | | | |
Unconsolidated JV normalizing items 5 | 90 | 93 | 117 | 96 | | | | | | | | | | | | | | | |
Normalized FFO adjustments | $19,127 | $(3,839) | $24,868 | $23,900 | | | | | | | | | | | | | | | |
Normalized FFO adjustments per common share - diluted | $0.05 | $(0.01) | $0.06 | $0.06 | | | | | | | | | | | | | | | |
Normalized FFO | $148,068 | $149,849 | $152,846 | $159,801 | | | | | | | | | | | | | | | |
Normalized FFO per common share - diluted | $0.39 | $0.39 | $0.40 | $0.42 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Non-real estate depreciation and amortization | 475 | 802 | 604 | 624 | | | | | | | | | | | | | | | |
Non-cash interest amortization, net 6 | 1,402 | 1,618 | 682 | 2,284 | | | | | | | | | | | | | | | |
Rent reserves, net | 442 | (54) | 1,371 | (100) | | | | | | | | | | | | | | | |
Straight-line rent income, net | (8,470) | (8,005) | (8,246) | (9,873) | | | | | | | | | | | | | | | |
Stock-based compensation | 2,556 | 3,924 | 3,745 | 3,573 | | | | | | | | | | | | | | | |
Unconsolidated JV non-cash items 7 | (231) | (316) | (227) | (316) | | | | | | | | | | | | | | | |
Normalized FFO adjusted for non-cash items | 144,242 | 147,818 | 150,775 | 155,993 | | | | | | | | | | | | | | | |
2nd generation TI | (21,248) | (17,236) | (8,882) | (13,523) | | | | | | | | | | | | | | | |
Leasing commissions paid | (8,907) | (5,493) | (7,013) | (7,404) | | | | | | | | | | | | | | | |
Capital expenditures | (14,354) | (8,649) | (8,946) | (25,669) | | | | | | | | | | | | | | | |
Total maintenance capex | (44,509) | (31,378) | (24,841) | (46,596) | | | | | | | | | | | | | | | |
FAD | $99,733 | $116,440 | $125,934 | $109,397 | | | | | | | | | | | | | | | |
Quarterly dividends and OP distributions | $119,456 | $119,444 | $119,442 | $119,323 | | | | | | | | | | | | | | | |
FFO wtd avg common shares outstanding - diluted 8 | 383,428 | 383,409 | 383,335 | 383,228 | | | | | | | | | | | | | | | |
1Funds from operations (“FFO”) and FFO per share are operating performance measures adopted by NAREIT. NAREIT defines FFO as “net income (computed in accordance with GAAP) excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.”
2FFO, Normalized FFO and Funds Available for Distribution ("FAD") do not represent cash generated from operating activities determined in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs. FFO, Normalized FFO and FAD should not be considered alternatives to net income attributable to common stockholders as indicators of the Company's operating performance or as alternatives to cash flow as measures of liquidity.
3Potential common shares are not included in the computation of diluted earnings per share when a loss exists, as the effect would be an antidilutive per share amount.
4In Q1 2023, allowance for credit losses included a $5.2 million credit allowance for a mezzanine loan included in "Impairment of real estate and credit loss reserves" on the Statement of Income and $3.4 million reserve included in “Rental Income” on the Statement of Income for previously deferred rent and straight line rent for three skilled nursing facilities.
5Includes the Company's proportionate share of normalizing items related to unconsolidated joint ventures such as lease intangibles and acquisition and pursuit costs.
6Includes the amortization of deferred financing costs, discounts and premiums, and non-cash financing receivable amortization.
7Includes the Company's proportionate share of straight-line rent, net and rent reserves, net related to unconsolidated joint ventures.
8The Company utilizes the treasury stock method, which includes the dilutive effect of nonvested share-based awards outstanding of 432,597 for the three months ended September 30, 2023. Also includes the diluted impact of 4,042,993 OP units outstanding.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 9 |
| | |
Capital Funding & Commitments 1 |
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
ACQUISITION AND RE/DEVELOPMENT FUNDING | | | | | | |
| 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | 3Q 2022 | | | | | | | | | |
Acquisitions 2 | $11,450 | $— | $31,500 | $26,388 | $91,253 | | | | | | | | | |
Re/development 3 | 30,945 | 32,068 | 16,928 | 23,372 | 31,546 | | | | | | | | | |
1st generation TI & acquisition capex 4 | 9,013 | 10,258 | 11,870 | 21,218 | 12,596 | | | | | | | | | |
| | | | | | | | | | | | | | |
MAINTENANCE CAPITAL EXPENDITURES FUNDING |
| 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | 3Q 2022 | | | | | | | | | |
| | | | | | | | | | | | | | |
2nd generation TI | $21,248 | $17,236 | $8,882 | $13,523 | $11,763 | | | | | | | | | |
Leasing commissions paid | 8,907 | 5,493 | 7,013 | 7,404 | 8,739 | | | | | | | | | |
Capital expenditures | 14,354 | 8,649 | 8,946 | 25,669 | 17,461 | | | | | | | | | |
| $44,509 | $31,378 | $24,841 | $46,596 | $37,963 | | | | | | | | | |
% of Cash NOI | | | | | | |
2nd generation TI | 10.4 | % | 8.3 | % | 4.2 | % | 6.4 | % | 5.5 | % | | | | | | | | | |
Leasing commissions paid | 4.4 | % | 2.6 | % | 3.3 | % | 3.5 | % | 4.1 | % | | | | | | | | | |
Capital expenditures | 7.0 | % | 4.2 | % | 4.3 | % | 12.1 | % | 8.1 | % | | | | | | | | | |
| 21.8 | % | 15.1 | % | 11.8 | % | 22.0 | % | 17.7 | % | | | | | | | | | |
| | | | | | | | | | | | | | |
LEASING COMMITMENTS 5 |
| 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | 3Q 2022 | | | | | | | | | |
Renewals | | | | | | | | | | | | | | |
Square feet | 625,762 | 638,587 | 949,285 | 623,363 | 632,690 | | | | | | | | | |
2nd generation TI/square foot/lease year | $1.76 | $1.64 | $1.84 | $1.90 | $1.66 | | | | | | | | | |
Leasing commissions/square foot/lease year | $1.48 | $1.19 | $0.87 | $0.78 | $1.03 | | | | | | | | | |
Renewal commitments as a % of annual net rent | 13.1 | % | 12.8 | % | 11.5 | % | 11.7 | % | 10.5 | % | | | | | | | | | |
WALT (in months) 5 | 42.1 | 56.7 | 56.8 | 51.7 | 50.1 | | | | | | | | | |
| | | | | | | | | | | | | | |
New leases | | | | | | | | | | | | | | |
Square feet | 344,524 | 205,565 | 274,344 | 297,340 | 262,904 | | | | | | | | | |
2nd generation TI/square foot/lease year | $5.57 | $7.11 | $4.44 | $6.25 | $4.84 | | | | | | | | | |
Leasing commissions/square foot/lease year | $1.81 | $1.40 | $0.83 | $1.49 | $1.39 | | | | | | | | | |
New lease commitments as a % of annual net rent | 32.1 | % | 45.0 | % | 21.6 | % | 36.2 | % | 28.1 | % | | | | | | | | | |
WALT (in months) 5 | 85.8 | 81.3 | 84.7 | 72.7 | 87.1 | | | | | | | | | |
| | | | | | | | | | | | | | |
All | | | | | | | | | | | | | | |
Square feet | 970,286 | 844,152 | 1,223,629 | 920,703 | 895,594 | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Leasing commitments as a % of annual net rent | 22.6 | % | 21.7 | % | 14.7 | % | 21.0 | % | 16.9 | % | | | | | | | | | |
WALT (in months) 5 | 57.6 | 62.7 | 63.1 | 58.4 | 61.0 | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
1On July 20, 2022, Legacy HR and HTA closed the merger of the two companies, in which Legacy HR was the acquirer under GAAP. Accordingly, the historic financial statements of the combined company are those of Legacy HR.
2Acquisitions include properties acquired through joint ventures at the Company's ownership percentage.
3Re/development funding includes capital spend on re/developments, development completions and unstabilized properties.
4Acquisition capex includes near-term fundings underwritten as part of recent acquisitions.
5Reflects leases commencing in the quarter. Excludes recently acquired or disposed properties, development completions, construction in progress, land held for development, corporate property, redevelopment properties, unstabilized properties, planned dispositions and assets classified as held for sale.
6WALT = weighted average lease term.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 10 |
| | |
Debt Metrics1 |
DOLLARS IN THOUSANDS |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
SUMMARY OF INDEBTEDNESS AS OF SEPTEMBER 30, 2023 | |
| PRINCIPAL BALANCE | BALANCE 1 | MATURITY DATE | MONTHS TO MATURITY 2 | INTEREST EXPENSE | CONTRACTUAL INTEREST EXPENSE | CONTRACTUAL RATE | EFFECTIVE RATE | FAIR VALUE MERGER ADJUSTED |
SENIOR NOTES | $250,000 | $249,391 | 5/1/2025 | 19 | | $2,470 | $2,422 | 3.88 | % | 4.12 | % | |
600,000 | 577,124 | 8/1/2026 | 34 | | 7,119 | 5,250 | 3.50 | % | 4.94 | % | Y |
500,000 | 482,665 | 7/1/2027 | 45 | | 5,737 | 4,688 | 3.75 | % | 4.76 | % | Y |
300,000 | 297,283 | 1/15/2028 | 52 | | 2,783 | 2,718 | 3.63 | % | 3.85 | % | |
650,000 | 572,883 | 2/15/2030 | 77 | | 7,563 | 5,038 | 3.10 | % | 5.30 | % | Y |
299,500 | 296,679 | 3/15/2030 | 78 | | 1,928 | 1,796 | 2.40 | % | 2.72 | % | |
299,785 | 295,706 | 3/15/2031 | 90 | | 1,593 | 1,538 | 2.05 | % | 2.25 | % | |
800,000 | 645,232 | 3/15/2031 | 90 | | 8,234 | 4,000 | 2.00 | % | 5.13 | % | Y |
| $3,699,285 | $3,416,963 | | 62 | | $37,427 | $27,450 | 2.97 | % | 4.43 | % | |
TERM LOANS | $350,000 | $349,711 | 7/20/2025 | 22 | | $5,638 | $5,638 | SOFR + 1.05% | 6.30 | % | |
200,000 | 199,845 | 5/31/2026 | 32 | | 3,222 | 3,222 | SOFR + 1.05% | 6.30 | % | |
150,000 | 149,606 | 6/1/2026 | 32 | | 2,416 | 2,416 | SOFR + 1.05% | 6.30 | % | |
300,000 | 299,952 | 10/31/2026 | 37 | | 4,833 | 4,833 | SOFR + 1.05% | 6.30 | % | |
200,000 | 199,467 | 7/1/2027 | 45 | | 3,222 | 3,222 | SOFR + 1.05% | 6.30 | % | |
300,000 | 298,184 | 1/12/2028 | 51 | | 4,833 | 4,833 | SOFR + 1.05% | 6.30 | % | |
| $1,500,000 | $1,496,765 | | 36 | | $24,164 | $24,164 | | 6.30 | % | |
$1.5B CREDIT FACILITY | $236,000 | $236,000 | 10/31/2027 | 49 | | $5,827 | $5,827 | SOFR + 0.95% | 6.24 | % | |
| | | | | | | | | |
MORTGAGES | $77,907 | $77,685 | various | 21 | | $788 | $831 | 4.20 | % | 4.21 | % | |
| $5,513,192 | $5,227,413 | | 54 | $68,206 | $58,272 | 4.03 | % | 5.05 | % | $2,550,000 |
Interest rate swaps | (5,315) | (5,315) | | | |
Interest cost capitalization | (795) | — | | | |
Unsecured credit facility fee & deferred financing costs | 2,292 | 954 | | | |
Amortization of fair value of swap maturing January 2024 | 988 | — | 1.21 | % | 3.21 | % | Y |
Financing right-of-use asset amortization | 928 | — | | | |
| | | | | $66,304 | $53,911 | | | |
| | | | | | | | | | | | | | | | | | | | | |
DEBT MATURITIES SCHEDULE AS OF SEPTEMBER 30, 2023 |
| | PRINCIPAL PAYMENTS | | |
| | BANK LOANS | SENIOR NOTES | MORTGAGE NOTES | TOTAL | | WA RATE |
2023 | | | | $7,155 | $7,155 | | 4.46 | % |
2024 | | | | 25,473 | 25,473 | | 4.39 | % |
2025 | | $350,000 | $250,000 | 16,375 | 616,375 | | 5.26 | % |
2026 | | 650,000 | 600,000 | 28,904 | 1,278,904 | | 4.92 | % |
2027 | | 436,000 | 500,000 | | 936,000 | | 5.07 | % |
2028 | | 300,000 | 300,000 | | 600,000 | | 4.96 | % |
Thereafter | | | 2,049,285 | | 2,049,285 | | 2.41 | % |
Total | | $1,736,000 | $3,699,285 | $77,907 | $5,513,192 | | 4.03 | % |
Fixed rate debt balance 3 | | $1,000,000 | $3,699,285 | $77,907 | $4,777,192 | | |
% fixed rate debt to net debt (as of 9/30) | | 87.0 | % | | |
Company share of JV net debt | | $12,570 | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | | |
INTEREST RATE SWAPS |
MATURITY | AMOUNT | FIXED SOFR RATE |
January 2024 | 200,000 | | 1.21 | % |
May 2026 | 100,000 | | 2.15 | % |
June 2026 | 150,000 | | 3.83 | % |
December 2026 | 150,000 | | 3.84 | % |
June 2027 | 150,000 | | 4.13 | % |
December 2027 | 250,000 | | 3.79 | % |
As of 9/30/2023 | $1,000,000 | 3.17 | % |
Subsequent activity: | | |
May 2026 | 100,000 | | 4.73 | % |
June 2027 | 50,000 | | 4.71 | % |
December 2027 | 50,000 | | 4.67 | % |
As of 11/3/2023 | $1,200,000 | 3.43 | % |
1Balances are reflected net of discounts, fair value adjustments, and deferred financing costs and include premiums.
2Includes extension options.
3Reflects $1.0 billion of interest rate swaps.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 11 |
| | |
Debt Covenants & Liquidity1 |
DOLLARS IN THOUSANDS |
|
| | | | | | | | | | | |
SELECTED FINANCIAL DEBT COVENANTS YEAR ENDED SEPTEMBER 30, 2023 2 | |
| CALCULATION | REQUIREMENT | PER DEBT COVENANTS |
Revolving credit facility and term loan | | |
Leverage ratio | Total debt/total capital | Not greater than 60% | 38.3 | % |
Secured leverage ratio | Total secured debt/total capital | Not greater than 30% | 0.5 | % |
Unencumbered leverage ratio | Unsecured debt/unsecured real estate | Not greater than 60% | 39.4 | % |
Fixed charge coverage ratio | EBITDA/fixed charges | Not less than 1.50x | 3.1x |
Unsecured coverage ratio | Unsecured EBITDA/unsecured interest | Not less than 1.75x | 3.1x |
| | | |
| | | |
Asset investments | Unimproved land, JVs & mortgages/total assets | Not greater than 35% | 8.5 | % |
| | | |
Senior Notes | | | |
Incurrence of total debt | Total debt/total assets | Not greater than 60% | 38.2 | % |
Incurrence of debt secured by any lien | Secured debt/total assets | Not greater than 40% | 0.5 | % |
Maintenance of total unsecured assets | Unencumbered assets/unsecured debt | Not less than 150% | 259.2 | % |
Debt service coverage | EBITDA/interest expense | Not less than 1.5x | 3.2x |
| | | |
Other | | | |
Net debt to adjusted EBITDA 3 | Net debt (debt less cash)/adjusted EBITDA | Not required | 6.6x |
| | | |
Net debt to enterprise value 4 | Net debt/enterprise value | Not required | 48.3 | % |
| | | | | |
LIQUIDITY SOURCES |
| |
Cash | $24,668 |
Unsecured credit facility availability | 1,264,000 |
Consolidated unencumbered assets (gross) 5 | 13,496,752 |
1On July 20, 2022, Legacy HR and HTA closed the merger of the two companies, in which Legacy HR was the acquirer under GAAP. Accordingly, the historic financial statements of the combined company are those of Legacy HR.
2Does not include all financial and non-financial covenants and restrictions that are required by the Company's various debt agreements. Financial measures include the Company's proportionate share of unconsolidated joint ventures, as applicable.
3Net debt includes the Company's share of unconsolidated JV net debt. See page 23 for a reconciliation of adjusted EBITDA.
4Based on the closing price of $15.27 on September 29, 2023 and 384,903,105 shares outstanding including outstanding OP units.
5Annualized third quarter 2023 unencumbered asset NOI was $786.8 million.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 12 |
| | |
Investment Activity |
DOLLARS IN THOUSANDS |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
MOB ACQUISITION ACTIVITY |
MARKET | COUNT | MILES TO CAMPUS | ASSOCIATED HEALTH SYSTEM | CLOSING | SQUARE FEET | LEASED % | PURCHASE PRICE 1 | % OWNERSHIP | |
Tampa, FL | 1 | 0.06 | BayCare Health | 3/10/2023 | 115,867 | 98 | % | $31,500 | 100 | % | |
Colorado Springs, CO | 1 | 1.30 | UC Health | 7/28/2023 | 42,770 | 94 | % | 11,450 | 100 | % | |
| | | | | | | | | |
| | | | | | | | | |
YTD total | 2 | | | | 158,637 | 97 | % | $42,950 | 100 | % | |
YTD average cap rate 2 | | | | | | 6.5 | % | | |
| | | | | | | | | | | | | | | | | | | |
DISPOSITIONS TO REPAY ASSET SALE TERM LOAN | |
LOCATION | | TYPE | CLOSING | SQUARE FEET | LEASED % | SALE PRICE | |
Tampa, FL & Miami, FL 3 | | MOB | 1/12/2023 | 224,037 | 100 | % | $93,250 | |
Dallas, TX 4 | | INPATIENT | 1/30/2023 | 36,691 | 100 | % | 19,210 | |
Total | | | | 260,728 | 100 | % | $112,460 | |
| | | | | | |
| | | | | | | |
ADDITIONAL DISPOSITION ACTIVITY | |
LOCATION | | TYPE | CLOSING | SQUARE FEET | LEASED % | SALE PRICE | |
St. Louis, MO | | MOB | 2/10/2023 | 6,500 | 100 | % | $350 | |
Los Angeles, CA | | MOB | 3/23/2023 | 37,165 | 100 | % | 21,000 | |
Los Angeles, CA 5 | | MOB | 3/30/2023 | 147,078 | 99 | % | 75,000 | |
Los Angeles, CA 6 | | LAND | 5/12/2023 | - | — | % | 3,300 | |
Albany, NY | | MOB | 6/30/2023 | 40,870 | 96 | % | 10,000 | |
Houston, TX | | OFFICE | 8/2/2023 | 57,170 | 88 | % | 8,320 | |
Atlanta, GA | | MOB | 8/22/2023 | 55,195 | 100 | % | 25,142 | |
Dallas, TX | | INPATIENT | 9/15/2023 | 161,264 | 100 | % | 115,000 | |
Houston, TX | | MOB | 9/18/2023 | 52,040 | — | % | 250 | |
Chicago, IL | | MOB | 9/27/2023 | 104,912 | 100 | % | 59,950 | |
| | | | | | | |
Total | | | | 662,194 | 91 | % | $318,312 | |
| | | | | | | |
| | | | | | |
Average cap rate 7 | | | | | 6.8 | % | |
1Includes joint venture acquisitions at full acquisition price.
2For acquisitions, cap rate represents the forecasted first year NOI divided by purchase price. Does not include fees earned related to the unconsolidated joint venture.
3Includes two properties, sold in two separate transactions to the same buyer on the same date.
4Values and square feet are represented at 100%. The Company retained a 40% ownership interest in the joint venture that purchased this property.
5The Company entered into a mortgage note agreement with the buyer for $45 million.
6The Company sold a land parcel totaling 0.34 acres.
7For dispositions, cap rate represents the in-place cash NOI divided by sales price.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 13 |
| | |
Re/development Activity |
DOLLARS IN THOUSANDS |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
RE/DEVELOPMENT PROJECTS | | |
MARKET | ASSOCIATED HEALTH SYSTEM | | SQUARE FEET | CURRENT LEASED % | BUDGET | COST TO COMPLETE | PROJECT START | ESTIMATED COMPLETION/INITIAL LEASE COMMENCEMENT |
Active development | | | | | | | |
Nashville, TN | Ascension | | 106,194 | 50 | % | $44,000 | $4,811 | 2Q 2021 | 3Q 2023 |
Orlando, FL 1 | Advent Health | | 156,566 | 78 | % | 65,000 | 35,621 | 1Q 2022 | 4Q 2024 |
Raleigh, NC | UNC REX Health | | 120,694 | 29 | % | 52,600 | 26,632 | 2Q 2022 | 4Q 2024 |
Orlando, FL | Exalt Health | | 45,000 | 100 | % | 25,900 | 22,106 | 1Q 2023 | 1Q 2025 |
Phoenix, AZ | HonorHealth | | 101,000 | 80 | % | 54,000 | 38,774 | 2Q 2023 | 2Q 2025 |
Total development | | 529,454 | 64 | % | $241,500 | $127,944 | | |
Projected stabilized yield - 6.5%-8.0% | | | |
Estimated stabilization period post completion - 12 - 36 months | | | |
| | | | | | | | |
Active redevelopment | | | | | | | |
Washington, DC | Inova Health | | 259,290 | 82 | % | $21,200 | $13,009 | 1Q 2022 | 2Q 2024 |
Houston, TX | HCA | | 314,861 | 61 | % | 30,000 | 27,918 | 2Q 2023 | 4Q 2025 |
Charlotte, NC | Novant Health | | 169,135 | 53 | % | 18,700 | 16,390 | 3Q 2023 | 1Q 2026 |
Washington, DC | Inova Health | | 57,323 | 64 | % | 10,078 | 7,263 | 3Q 2023 | 1Q 2026 |
Total redevelopment | | 800,609 | 66 | % | $79,978 | $64,580 | | |
Occupied % | | | | 60 | % | | | | |
Projected stabilized yield - 9.0%-12.0% | | | |
Estimated stabilization period post completion - 12 - 36 months | | | |
| | | | | | | | |
Total active re/development projects | 1,330,063 | 65 | % | $321,478 | $192,524 | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
1Investment is a construction loan with purchase rights upon completion.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 14 |
| | |
Portfolio 1,2 |
DOLLARS IN THOUSANDS |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
MARKETS | | | | |
| | | WHOLLY OWNED COUNT | | SQUARE FEET | WHOLLY OWNED |
| | | | | | | | | | |
MARKET | MSA RANK | | | MOB | | | INPATIENT | OFFICE | | WHOLLY OWNED | JOINT VENTURES3 | TOTAL | % OF NOI | CUMULATIVE % OF NOI |
Dallas, TX | 4 | | 44 | | 3,308,315 | | | 146,519 | 199,800 | | 3,654,634 | 226,076 | 3,880,710 | 8.9 | % | 8.9 | % |
Seattle, WA | 15 | | 29 | | 1,592,501 | | | | | | 1,592,501 | | 1,592,501 | 6.1 | % | 15.0 | % |
Boston, MA | 11 | | 18 | | 964,945 | | | | | | 964,945 | | 964,945 | 4.6 | % | 19.6 | % |
Houston, TX | 5 | | 31 | | 2,351,135 | | | 67,500 | | | 2,418,635 | | 2,418,635 | 4.5 | % | 24.1 | % |
Los Angeles, CA | 2 | | 21 | | 1,034,336 | | | 63,000 | 104,377 | | 1,201,713 | 702,453 | 1,904,166 | 4.3 | % | 28.4 | % |
Denver, CO | 19 | | 33 | | 1,780,819 | | | | 93,869 | | 1,874,688 | 116,616 | 1,991,304 | 4.3 | % | 32.7 | % |
Charlotte, NC | 23 | | 32 | | 1,792,908 | | | | | | 1,792,908 | | 1,792,908 | 4.3 | % | 37.0 | % |
Atlanta, GA | 8 | | 27 | | 1,423,141 | | | | | | 1,423,141 | | 1,423,141 | 3.8 | % | 40.8 | % |
Miami, FL | 9 | | 20 | | 1,244,531 | | | 133,500 | | | 1,378,031 | | 1,378,031 | 3.5 | % | 44.3 | % |
Nashville, TN | 35 | | 12 | | 1,135,678 | | | | 108,691 | | 1,244,369 | | 1,244,369 | 2.9 | % | 47.2 | % |
Raleigh, NC | 41 | | 28 | | 1,109,582 | | | | | | 1,109,582 | | 1,109,582 | 2.8 | % | 50.0 | % |
Phoenix, AZ | 10 | | 35 | | 1,512,304 | | | | | | 1,512,304 | | 1,512,304 | 2.8 | % | 52.8 | % |
Austin, TX | 27 | | 13 | | 863,700 | | | | | | 863,700 | | 863,700 | 2.6 | % | 55.4 | % |
Tampa. FL | 18 | | 19 | | 971,975 | | | | | | 971,975 | | 971,975 | 2.5 | % | 57.9 | % |
Indianapolis, IN | 33 | | 40 | | 1,162,955 | | | 61,398 | | | 1,224,353 | 273,479 | 1,497,832 | 2.4 | % | 60.3 | % |
New York, NY | 1 | | 15 | | 704,415 | | | | | | 704,415 | | 704,415 | 2.0 | % | 62.3 | % |
Orlando, FL | 22 | | 8 | | 359,477 | | | 186,998 | | | 546,475 | | 546,475 | 1.9 | % | 64.2 | % |
San Francisco, CA | 13 | | 6 | | 452,666 | | | | | | 452,666 | 110,865 | 563,531 | 1.8 | % | 66.0 | % |
Memphis, TN | 44 | | 11 | | 802,221 | | | 54,416 | | | 856,637 | | 856,637 | 1.8 | % | 67.8 | % |
Chicago, IL | 3 | | 6 | | 607,845 | | | | | | 607,845 | | 607,845 | 1.8 | % | 69.6 | % |
Other (53 markets) | | | 215 | | 10,897,805 | | | 574,976 | 1,228,363 | | 12,701,144 | 519,911 | 13,221,055 | 30.4 | % | 100.0 | % |
Total | | | 663 | | 36,073,254 | | | 1,288,307 | 1,735,100 | | 39,096,661 | 1,949,400 | 41,046,061 | 100.0 | % | |
Number of properties | | | | 636 | | | 18 | 9 | | 663 | 34 | 697 | | |
% of square feet | | | | | 92.3 | % | | | 3.3 | % | 4.4 | % | | 100.0 | % | | | | |
% multi-tenant | | | | | 85.7 | % | | | — | % | 60.4 | % | | 81.7 | % | | | | |
Investment | | | | | $12,373,395 | | | $511,375 | $485,680 | | $13,370,450 | | | | |
Quarterly cash NOI 1 | | | | $179,631 | | | $9,528 | $7,062 | | $196,221 | | | | |
% of cash NOI | | | | | 91.5 | % | | | 4.9 | % | 3.6 | % | | 100.0 | % | | | | |
| | | | | | | | | | | | | | | | | |
BY BUILDING TYPE | | | | | |
| WHOLLY OWNED | | |
| MULTI-TENANT | SINGLE-TENANT | SUBTOTAL | JOINT VENTURE3 | TOTAL |
Number of properties | 530 | 133 | 663 | 34 | 697 |
Square feet | 31,957,299 | 7,139,362 | 39,096,661 | 1,949,400 | 41,046,061 |
% of square feet | 77.9 | % | 17.4 | % | 95.3 | % | 4.7 | % | 100.0 | % |
Investment 1 | $10,503,116 | $2,867,334 | $13,370,450 | $358,015 | $13,728,465 |
Quarterly cash NOI 1 | $149,875 | $46,346 | $196,221 | $4,692 | $200,913 |
% of cash NOI | 74.6 | % | 23.1 | % | 97.7 | % | 2.3 | % | 100.0 | % |
1Gross investment and quarterly cash NOI are reflected at the Company's ownership percentage.
2Excludes assets held for sale, land held for development, construction in progress and corporate property.
3The Company's weighted average ownership percentage in its joint ventures was approximately 44%.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 15 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
MOB PORTFOLIO | | |
| | | BUILDING SQUARE FEET | # OF BLDGS | | LEASED BY HEALTH SYSTEM | % OF LEASED SF | # OF LEASES |
| | | | | | |
HEALTH SYSTEM | SYSTEM RANK 2 | CREDIT RATING | ON/ADJACENT 3 | OFF-CAMPUS AFFILIATED 4 | TOTAL | % OF NOI |
HCA | 1 | BBB-/Baa3 | 2,267,969 | 779,288 | 3,047,257 | | 46 | 8.7 | % | 784,226 | 2.5 | % | 131 |
CommonSpirit | 4 | A-/Baa1 | 1,906,957 | 636,320 | 2,543,277 | | 44 | 7.0 | % | 906,873 | 2.9 | % | 163 |
Baylor Scott & White | 21 | AA-/Aa3 | 2,570,180 | 66,376 | 2,636,556 | | 29 | 6.6 | % | 1,264,135 | 4.0 | % | 195 |
Ascension Health | 3 | AA+/Aa2 | 2,156,369 | 97,551 | 2,253,920 | | 24 | 5.7 | % | 924,075 | 2.9 | % | 145 |
Advocate Health | 14 | AA/Aa3 | 790,317 | 496,198 | 1,286,515 | | 20 | 4.0 | % | 1,125,820 | 3.6 | % | 95 |
Tenet Healthcare Corporation | 6 | B+/B1 | 1,298,392 | 376,410 | 1,674,802 | | 29 | 3.7 | % | 390,966 | 1.2 | % | 81 |
Wellstar Health System | 75 | A+/A2 | 896,773 | 23,088 | | 919,861 | | 18 | 2.7 | % | 582,754 | 1.9 | % | 81 |
UW Medicine (Seattle) | 91 | AA+/Aaa | 461,363 | 169,709 | 631,072 | | 10 | 2.6 | % | 294,971 | 0.9 | % | 32 |
AdventHealth | 11 | AA/Aa2 | 797,587 | 118,585 | | 916,172 | | 14 | 2.6 | % | 411,598 | 1.3 | % | 81 |
Community Health Systems | 8 | CCC+/Caa1 | 785,169 | — | | 785,169 | | 16 | 2.0 | % | 353,558 | 1.1 | % | 46 |
Baptist Memorial Health Care | 89 | A-2/-- | 544,122 | 252,414 | 796,536 | | 10 | 2.0 | % | 430,579 | 1.4 | % | 57 |
Cedars-Sinai Health Systems | 51 | AA-/Aa3 | 199,701 | 90,607 | 290,308 | | 5 | 1.6 | % | 54,636 | 0.2 | % | 20 |
Providence St. Joseph Health | 5 | A/A2 | 330,287 | 31,601 | 361,888 | | 8 | 1.6 | % | 137,032 | 0.4 | % | 25 |
Trinity Health | 7 | AA-/Aa3 | 678,920 | 22,956 | 701,876 | | 11 | 1.6 | % | 353,168 | 1.1 | % | 55 |
Hawaii Pacific Health | 181 | --/A1 | 173,502 | 124,925 | 298,427 | | 3 | 1.4 | % | 98,398 | 0.3 | % | 39 |
Banner Health | 24 | AA-/-- | 749,075 | 31,039 | 780,114 | | 24 | 1.4 | % | 141,286 | 0.5 | % | 36 |
WakeMed | 185 | --/A2 | 373,980 | 101,597.00 | | 475,577 | | 13 | 1.3 | % | 144,265 | 0.5 | % | 21 |
Bon Secours Health System | 22 | A+/A1 | 405,945 | — | | 405,945 | | 6 | 1.3 | % | 242,817 | 0.8 | % | 50 |
Overlake Health System | 291 | A/Baa1 | 230,710 | — | | 230,710 | | 3 | 1.2 | % | 73,676 | 0.3 | % | 8 |
MedStar Health | 45 | A/A2 | 326,129 | — | | 326,129 | | 4 | 1.1 | % | 203,507 | 0.6 | % | 65 |
UNC Health Care | 62 | A+/Aa3 | 273,186 | 84,886 | | 358,072 | | 8 | 1.1 | % | 220,478 | 0.7 | % | 28 |
Other (70 credit rated) | | | 6,508,778 | 3,531,414 | 10,040,192 | | 195 | | 27.2 | % | 4,397,962 | 14.0 | % | |
Subtotal - credit rated 5 | | | 24,725,411 | 7,034,964 | 31,760,375 | | 540 | | 88.4 | % | 13,536,780 | 43.1 | % | |
Other non-credit rated 6 | | | 1,281,438 | 612,886 | 1,894,324 | | 37 | 6.5 | % | 864,229 | 2.8 | % | |
Off-campus non-affiliated 7 | | | — | 2,418,555 | 2,418,555 | | 59 | 5.1 | % | — | — | % | |
Wholly-owned | | | 26,006,849 | 10,066,405 | 36,073,254 | | 636 | 100.0 | % | 14,401,009 | 45.9 | % | |
Joint ventures | | | 1,143,456 | 579,868 | 1,723,324 | | | | | | |
Total | | | 27,150,305 | 10,646,273 | 37,796,578 | | | | | | |
1Excludes construction in progress and assets classified as held for sale.
2Ranked by revenue based on Modern Healthcare's Healthcare Systems Financials Database.
3The Company defines an adjacent property as being no more than 0.25 miles from a hospital campus.
4Includes off-campus buildings where health systems lease 20% or more of the property and/or are located within 2 miles from a hospital campus.
5Based on square footage, 80% is associated and 41% is leased by an investment-grade rated healthcare provider.
6Includes 37 properties associated with a hospital system that is not credit rated.
7Includes off-campus buildings that are not 20% or more leased by a health system and are more than two miles from a hospital campus.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 16 |
| | |
MOB Proximity to Hospital 1,2 |
|
|
| | | | | | | | | | | | | | | |
MOB BY LOCATION | | | | | |
| | | | | |
| # OF PROPERTIES | SQUARE FEET | TOTAL | % GROUND LEASED | |
On campus | 237 | 18,227,405 | 48.2 | % | 37.6 | % | |
Adjacent to campus 3 | 187 | 8,922,900 | 23.6 | % | 3.9 | % | |
Total on/adjacent | 424 | 27,150,305 | 71.8 | % | 41.5 | % | |
Off campus - affiliated 4 | 177 | 8,094,357 | 21.4 | % | 3.8 | % | |
Off campus | 62 | 2,551,916 | 6.8 | % | 0.6 | % | |
| 663 | 37,796,578 | 100.0 | % | 45.9 | % | |
Wholly-owned | 636 | 36,073,254 | | | |
Joint ventures | 27 | 1,723,324 | | | |
| | | | | | | | | | | | | | | | | | | | | |
MOB BY CLUSTER 5 | |
| | | | | | | |
| TOTAL | HOSPITAL CENTRIC 6 | |
| # OF PROPERTIES | SQUARE FEET | % OF MOB SQUARE FEET | # OF PROPERTIES | SQUARE FEET | % OF MOB SQUARE FEET | |
Clustered | 474 | 26,303,078 | 69.6 | % | 391 | 22,954,855 | 72.0 | % | |
Non-clustered | 189 | 11,493,500 | 30.4 | % | 129 | 8,915,134 | 28.0 | % | |
Total | 663 | 37,796,578 | 100.0 | % | 520 | 31,869,989 | 100.0 | % | |
1Includes joint venture properties and excludes construction in progress and assets classified as held for sale.
2Proximity to hospital campus includes acute care hospitals with inpatient beds. The Company does not consider inpatient rehab hospitals (IRFs), skilled nursing facilities (SNFs) or long-term acute care hospitals (LTACHs) to be hospital campuses for distance calculations.
3The Company defines an adjacent property as being no more than 0.25 miles from a hospital campus.
4Includes off-campus buildings where health systems lease 20% or more of the property and/or are located within 2 miles from a hospital campus.
5A cluster is defined as at least two properties within a geographic radius of two miles. The Company believes clusters provide operational efficiencies and greater local leasing knowledge that accelerate NOI growth.
6Includes buildings that are located within two miles of a hospital campus.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 17 |
| | |
Lease Maturity & Occupancy1 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
LEASE MATURITY SCHEDULE | | | | | |
| | SQUARE FEET | # OF WHOLLY-OWNED LEASES |
| | WHOLLY-OWNED AND JOINT VENTURE | | |
| | MULTI-TENANT 2 | SINGLE-TENANT | TOTAL | % OF TOTAL | JOINT VENTURES | WHOLLY-OWNED |
Month-to-month | | 481,633 | 643 | 482,276 | 1.3 | % | 20,018 | 462,258 | 226 |
2023 | | 848,821 | 210,341 | 1,059,162 | 2.9 | % | 61,705 | 997,457 | 265 |
2024 | | 4,690,902 | 958,593 | 5,649,495 | 15.7 | % | 221,589 | 5,427,906 | 1,387 |
2025 | | 3,754,961 | 992,940 | 4,747,901 | 13.2 | % | 183,551 | 4,564,350 | 1,084 |
2026 | | 3,782,930 | 484,579 | 4,267,509 | 11.9 | % | 122,587 | 4,144,922 | 999 |
2027 | | 3,351,159 | 999,428 | 4,350,587 | 12.1 | % | 149,766 | 4,200,821 | 842 |
2028 | | 2,813,638 | 665,562 | 3,479,200 | 9.7 | % | 82,809 | 3,396,391 | 744 |
2029 | | 1,760,028 | 970,949 | 2,730,977 | 7.6 | % | 342,627 | 2,388,350 | 396 |
2030 | | 1,813,297 | 756,694 | 2,569,991 | 7.2 | % | 85,985 | 2,484,006 | 355 |
2031 | | 1,051,642 | 137,827 | 1,189,469 | 3.3 | % | 27,799 | 1,161,670 | 237 |
2032 | | 1,816,462 | 361,573 | 2,178,035 | 6.1 | % | 62,415 | 2,115,620 | 285 |
Thereafter | | 2,388,213 | 836,298 | 3,224,511 | 9.0 | % | 333,976 | 2,890,535 | 365 |
Total occupied | | 28,553,686 | 7,375,427 | 35,929,113 | 87.5 | % | 1,694,827 | 34,234,286 | 7,185 |
Total building | | 33,551,933 | 7,494,128 | 41,046,061 | | 1,949,400 | 39,096,661 | |
Occupancy | | 85.1 | % | 98.4 | % | 87.5 | % | | 86.9 | % | 87.6 | % | |
Leased % | | 87.2 | % | 98.4 | % | 89.2 | % | | 87.7 | % | 89.3 | % | |
WALTR (months) 3 | 50.1 | 64.3 | 55.7 | | | 51.8 | |
WALT (months) 3 | 96.5 | 140.3 | 110.7 | | | 104.0 | |
1Excludes land held for development, construction in progress, corporate property and assets classified as held for sale, unless noted otherwise.
2The average lease size in the wholly-owned multi-tenant portfolio is 3,968 square feet.
3WALTR = weighted average lease term remaining; WALT = weighted average lease term.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 18 |
| | | | | | | | | | |
MERGER COMBINED SAME STORE RENEWALS 1 |
| Q3 2023 | TTM | | |
| | | | |
MOB cash leasing spreads 2 | 4.8 | % | 3.6 | % | | |
| | | | |
MOB cash leasing spreads distribution | | | |
< 0% spread | 0.7 | % | 5.5 | % | | |
0-3% spread | 2.9 | % | 14.6 | % | | |
3-4% spread | 77.2 | % | 62.8 | % | | |
> 4% spread | 19.2 | % | 17.1 | % | | |
Total | 100.0 | % | 100.0 | % | | |
| | | | |
Tenant retention rate | 76.1 | % | 79.0 | % | | |
| | | | |
| | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
AVERAGE IN-PLACE CONTRACTUAL INCREASES 3 |
| MULTI-TENANT | SINGLE-TENANT | TOTAL |
| % INCREASE | % OF BASE RENT | | % INCREASE | % OF BASE RENT | | % INCREASE | % OF BASE RENT |
Merger combined same store 1 | 2.84 | % | 68.0 | % | | 2.52 | % | 17.7 | % | | 2.77 | % | 85.7 | % |
Acquisitions | 2.80 | % | 4.8 | % | | 2.93 | % | 0.5 | % | | 2.82 | % | 5.3 | % |
Other 4 | 2.69 | % | 7.0 | % | | 2.30 | % | 2.0 | % | | 2.60 | % | 9.0 | % |
Total | 2.82 | % | 79.8 | % | | 2.51 | % | 20.2 | % | | 2.76 | % | 100.0 | % |
Escalator type | | | | | | | | |
Fixed | 2.77 | % | 96.7 | % | | 2.58 | % | 88.1 | % | | 2.74 | % | 95.0 | % |
CPI | 4.29 | % | 3.3 | % | | 1.99 | % | 11.9 | % | | 3.19 | % | 5.0 | % |
| | | | | | | | | | | | | | |
TYPE AND OWNERSHIP STRUCTURE 1 |
| MULTI-TENANT | SINGLE-TENANT | | TOTAL |
Tenant type | | | | |
Hospital | 46.4 | % | 71.0 | % | | 51.4 | % |
Physician and other | 53.6 | % | 29.0 | % | | 48.6 | % |
| | | | |
Lease structure | | | | |
Gross | 8.9 | % | 3.0 | % | | 7.7 | % |
Modified gross | 31.3 | % | 10.9 | % | | 27.3 | % |
Net | 59.8 | % | 64.6 | % | | 60.8 | % |
Absolute net 5 | — | % | 21.5 | % | | 4.3 | % |
| | | | |
Ownership type | | | | |
Ground lease | 44.7 | % | 39.0 | % | | 43.7 | % |
Fee simple | 55.3 | % | 61.0 | % | | 56.3 | % |
| | | | | | | | | | | |
# OF LEASES BY SIZE 6 | |
LEASED SQUARE FEET | # OF LEASES | WALT | WALTR |
0 - 2,500 | 3,652 | | 71.8 | | 36.7 | |
2,501 - 5,000 | 1,808 | | 82.9 | | 41.8 | |
5,001 - 7,500 | 638 | | 93.9 | | 47.0 | |
7,501 - 10,000 | 359 | | 100.2 | | 51.9 | |
10,001 + | 728 | | 123.9 | | 60.8 | |
Total Leases | 7,185 | | 104.0 | | 51.8 | |
| | | |
| | | |
| | | |
|
| | | |
| | | |
1Excludes recently acquired or disposed properties, construction in progress, land held for development, corporate property, planned dispositions and assets classified as held for sale.
2Excludes non-MOB renewals of 5,000 square feet and 54,000 square feet for the third quarter and trailing twelve months, respectively.
3Excludes leases with lease terms of one year or less.
4Includes redevelopment properties, development completion, and joint ventures.
5Tenant is typically responsible for operating expenses and capital obligations.
6Excludes joint ventures, land held for development, construction in progress, corporate property and assets classified as held for sale.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 19 |
| | |
Merger Combined Same Store1 |
DOLLARS IN THOUSANDS, EXCEPT PER SQUARE FOOT DATA |
REFLECTS COMBINED COMPANY RESULTS FOR ALL PERIODS |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
TOTAL MERGER COMBINED CASH NOI |
| % of Total NOI | 3Q 2023 | 2Q 2023 | 3Q 2022 | Y-o-Y% CHANGE | TTM 2023 | TTM 2022 | % CHANGE |
Multi-tenant | 66 | % | $ | 136,041 | | $ | 137,637 | | $ | 133,188 | | 2.1 | % | $ | 545,690 | | $ | 530,580 | | 2.8 | % |
Single-tenant | 21 | % | 43,220 | | 42,422 | | 42,257 | | 2.3 | % | 170,825 | | 166,542 | | 2.6 | % |
Joint venture | 1 | % | 2,530 | | 2,619 | | 2,293 | | 10.3 | % | 10,050 | | 9,342 | | 7.6 | % |
Merger combined same store | 89 | % | $ | 181,791 | | $ | 182,678 | | $ | 177,738 | | 2.3 | % | $ | 726,565 | | $ | 706,464 | | 2.8 | % |
Planned dispositions | 1 | % | 1,453 | | 1,348 | | 2,058 | | (29.4 | %) | 6,970 | | 9,923 | | (29.8 | %) |
Re/development | 1 | % | 2,116 | | 2,455 | | 3,510 | | (39.7 | %) | 10,594 | | 15,349 | | (31.0 | %) |
Wholly owned and joint venture acquisitions | 7 | % | 13,797 | | 13,396 | | 10,582 | | 30.4 | % | 52,016 | | 26,535 | | 96.0 | % |
Development completions | 1 | % | 1,756 | | 1,513 | | 1,188 | | 47.8 | % | 5,941 | | 4,120 | | 44.2 | % |
Completed dispositions & assets held for sale | 2 | % | 3,808 | | 6,350 | | 19,302 | | (80.3 | %) | 31,505 | | 95,596 | | (67.0 | %) |
Merger combined total cash NOI | 100 | % | $204,721 | | $207,740 | | $214,378 | | (4.5 | %) | $833,591 | | $857,987 | | (2.8 | %) |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
PORTFOLIO OCCUPANCY AND ABSORPTION | | | |
| | | | OCCUPANCY % | ABSORPTION (square feet in thousands) |
| COUNT | SQUARE FEET | | 3Q 2023 | 2Q 2023 | 3Q 2022 | SEQUENTIAL | Y-O-Y |
Multi-tenant | 462 | 28,232,890 | | 86.7 | % | 86.9 | % | 86.6 | % | (31) | 42 |
Single-tenant | 122 | 6,564,946 | | 99.6 | % | 99.5 | % | 99.5 | % | 12 | 12 |
Joint venture | 12 | 997,543 | | 87.9 | % | 88.4 | % | 87.7 | % | (5) | 2 |
Merger combined same store | 596 | 35,795,379 | | 89.1 | % | 89.2 | % | 89.0 | % | (24) | 56 |
Planned dispositions | 8 | 582,186 | | 71.1 | % | 72.0 | % | 82.4 | % | (5) | (66) |
Re/development | 16 | 1,368,720 | | 51.1 | % | 51.6 | % | 63.3 | % | (7) | (164) |
Wholly owned and joint venture acquisitions | 72 | 2,894,596 | | 90.2 | % | 90.4 | % | 87.9 | % | (5) | 48 |
Development completions | 5 | 405,180 | | 73.3 | % | 71.1 | % | 66.6 | % | 9 | 43 |
Total portfolio | 697 | 41,046,061 | | 87.5 | % | 87.6 | % | 87.8 | % | (32) | (83) |
Joint ventures | 34 | 1,949,400 | | 86.9 | % | 87.0 | % | 85.5 | % | (2) | 24 |
Total wholly-owned | 663 | 39,096,661 | | 87.6 | % | 87.6 | % | 87.9 | % | (30) | (107) |
1Same store properties are properties that have been included in operations for the duration of the year-over-year comparison period presented. Accordingly, same store properties exclude properties that were recently acquired or disposed of, properties classified as held for sale or intended for sale, properties undergoing redevelopment, and newly redeveloped or developed properties. Legacy HTA properties that met the same store criteria are included in both periods shown as if they were owned by the Company for the full analysis period.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 20 |
| | |
Merger Combined Same Store1, 2 |
DOLLARS IN THOUSANDS, EXCEPT PER SQUARE FOOT DATA |
REFLECTS COMBINED COMPANY RESULTS FOR ALL PERIODS |
| | | | | | | | | | | | | | | | | |
MERGER COMBINED SAME STORE CASH NOI |
| TOTAL |
| 3Q 2023 | 2Q 2023 | 3Q 2022 | TTM 2023 | TTM 2022 |
Base revenue | $219,904 | $219,317 | $215,632 | $873,376 | $850,489 |
Op. exp. recoveries | 73,122 | 68,312 | 68,257 | 276,509 | 261,261 |
Revenues | $293,026 | $287,629 | $283,889 | $1,149,885 | $1,111,750 |
Expenses | 111,235 | 104,951 | 106,151 | 423,320 | 405,286 |
Cash NOI | $181,791 | $182,678 | $177,738 | $726,565 | $706,464 |
Revenue per occ SF 3 | $36.72 | $36.02 | $35.64 | $36.04 | $34.96 |
Margin | 62.0 | % | 63.5 | % | 62.6 | % | 63.2 | % | 63.5 | % |
Average occupancy | 89.2 | % | 89.2 | % | 89.0 | % | 89.1 | % | 88.8 | % |
Period end occupancy | 89.1 | % | 89.2 | % | 89.0 | % | 89.1 | % | 89.0 | % |
Number of properties | 596 | 596 | 596 | 596 | 596 |
| | | | | |
Year-Over-Year Change | | | | | |
Revenue per occ SF 4 | 3.0 | % | | | 3.1 | % | |
Avg occupancy (bps) | +20 | | | +30 | |
Revenues | 3.2 | % | | | 3.4 | % | |
Base revenue | 2.0 | % | | | 2.7 | % | |
Exp recoveries | 7.1 | % | | | 5.8 | % | |
Expenses | 4.8 | % | | | 4.4 | % | |
Cash NOI | 2.3 | % | | | 2.8 | % | |
1Same store properties are properties that have been included in operations for the duration of the year-over-year comparison period presented. Accordingly, same store properties exclude properties that were recently acquired or disposed of, properties classified as held for sale or intended for sale, properties undergoing redevelopment, and newly redeveloped or developed properties. Legacy HTA properties that met the same store criteria are included in both periods shown as if they were owned by the Company for the full analysis period.
2Excludes recently acquired or disposed properties, development completions, construction in progress, land held for development, corporate property, redevelopment properties, planned dispositions and assets classified as held for sale.
3Revenue per occ SF is calculated by dividing revenue by the average of the occupied SF for the period provided. Quarterly revenue per occ SF is annualized.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 21 |
| | |
NOI Reconciliations |
DOLLARS IN THOUSANDS |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
BOTTOM UP RECONCILIATION | | | | | | | | | | | | | | | |
| 3Q 2023 | 2Q 2023 | 1Q 2023 | | 4Q 2022 | | 3Q 2022 | 2Q 2022 | 1Q 2022 | 4Q 2021 | | | | | |
Net income (loss) attr. to common stockholders | ($67,844) | | ($82,759) | | ($87,125) | | | ($35,764) | | | $28,304 | | $6,130 | | $42,227 | | $21,607 | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Other income (expense) | 74,621 | | 112,818 | | 94,407 | | | 46,772 | | | (89,477) | | 7,479 | | (29,293) | | (468) | | | | | | |
General and administrative expense | 13,396 | | 15,464 | | 14,935 | | | 14,417 | | | 16,741 | | 10,540 | | 11,036 | | 8,901 | | | | | | |
Depreciation and amortization expense | 182,989 | | 183,193 | | 184,479 | | | 185,275 | | | 158,117 | | 55,731 | | 54,041 | | 51,810 | | | | | | |
Other expenses 1 | 11,783 | | (11,969) | | 7,940 | | | 13,580 | | | 82,659 | | 11,034 | | 9,929 | | 3,850 | | | | | | |
Straight-line rent expense | 1,538 | | 1,525 | | 1,537 | | | 1,358 | | | 1,260 | | 378 | | 378 | | 382 | | | | | | |
Straight-line rent revenue | (10,008) | | (9,530) | | (9,782) | | | (11,231) | | | (8,975) | | (1,705) | | (1,587) | | (1,227) | | | | | | |
Other revenue 2 | (6,446) | | (5,959) | | (1,686) | | | (7,330) | | | (5,242) | | (1,961) | | (2,044) | | (2,134) | | | | | | |
Joint venture property cash NOI | 4,692 | | 4,957 | | 4,769 | | | 4,579 | | | 3,877 | | 2,551 | | 2,052 | | 1,331 | | | | | | |
Cash NOI | $204,721 | | $207,740 | | $209,474 | | | $211,656 | | | $187,264 | | $90,177 | | $86,739 | | $84,052 | | | | | | |
Pre-merger Legacy HTA NOI | — | | — | | — | | | — | | | 27,114 | | 128,025 | | 127,363 | | 127,253 | | | | | | |
Cash NOI including pre-merger Legacy HTA NOI | $204,721 | | $207,740 | | $209,474 | | | $211,656 | | | $214,378 | | $218,202 | | $214,102 | | $211,305 | | | | | | |
Planned dispositions | (1,453) | | (1,348) | | (2,087) | | | (2,082) | | | (2,058) | | (2,582) | | (2,669) | | (2,614) | | | | | | |
Redevelopment | (2,116) | | (2,455) | | (2,836) | | | (3,187) | | | (3,510) | | (3,605) | | (3,952) | | (4,282) | | | | | | |
Wholly owned and joint venture acquisitions | (13,797) | | (13,396) | | (12,767) | | | (12,056) | | | (10,582) | | (9,152) | | (5,371) | | (1,430) | | | | | | |
Development completions | (1,756) | | (1,513) | | (1,360) | | | (1,312) | | | (1,188) | | (1,158) | | (1,153) | | (621) | | | | | | |
Completed dispositions & assets held for sale | (3,808) | | (6,350) | | (8,790) | | | (12,557) | | | (19,302) | | (23,548) | | (25,648) | | (27,098) | | | | | | |
Merger combined same store cash NOI | $181,791 | | $182,678 | | $181,634 | | | $180,462 | | | $177,738 | | $178,157 | | $175,309 | | $175,260 | | | | | | |
Same store joint venture properties | (2,530) | | (2,619) | | (2,468) | | | (2,433) | | | (2,293) | | (2,429) | | (2,416) | | (2,204) | | | | | | |
Merger combined same store excluding JVs | $179,261 | | $180,059 | | $179,166 | | | $178,029 | | | $175,445 | | $175,728 | | $172,893 | | $173,056 | | | | | | |
| | | | | | | | | | | | | | | |
TOP DOWN RECONCILIATION | | | | | | | | | | | | | | | |
| 3Q 2023 | 2Q 2023 | 1Q 2023 | | 4Q 2022 | | 3Q 2022 | 2Q 2022 | 1Q 2022 | 4Q 2021 | | | | | |
Rental income before rent concessions | $336,503 | | $332,992 | | $328,115 | | | $332,652 | | | $301,692 | | $142,073 | | $139,775 | | $132,853 | | | | | | |
Rent concessions | (3,168) | | (3,312) | | (4,022) | | | (3,253) | | | (2,761) | | (1,441) | | (1,286) | | (1,139) | | | | | | |
Rental income | 333,335 | | 329,680 | | 324,093 | | | 329,399 | | | 298,931 | | 140,632 | | 138,489 | | 131,714 | | | | | | |
Parking income | 2,751 | | 2,370 | | 2,391 | | | 2,413 | | | 2,428 | | 1,919 | | 1,753 | | 2,134 | | | | | | |
Interest from financing receivable, net | 2,002 | | 2,180 | | 2,227 | | | 2,284 | | | 2,034 | | 1,957 | | 1,930 | | 1,766 | | | | | | |
Exclude straight-line rent revenue | (10,008) | | (9,530) | | (9,782) | | | (11,231) | | | (8,975) | | (1,705) | | (1,587) | | (1,227) | | | | | | |
Exclude other non-cash revenue 3 | (1,410) | | (1,018) | | 3,594 | | | (3,059) | | | (2,280) | | (1,142) | | (1,322) | | (1,325) | | | | | | |
Cash revenue | 326,670 | | 323,682 | | 322,523 | | | 319,806 | | | 292,138 | | 141,661 | | 139,263 | | 133,062 | | | | | | |
Property operating expense | (131,639) | | (125,395) | | (122,040) | | | (117,009) | | | (112,473) | | (57,010) | | (57,464) | | (53,032) | | | | | | |
Exclude non-cash expenses 4 | 5,079 | | 4,556 | | 4,336 | | | 3,764 | | | 4,034 | | 2,975 | | 2,888 | | 2,691 | | | | | | |
Non-controlling interest | (81) | | (60) | | (114) | | | 516 | | | (312) | | — | | — | | — | | | | | | |
Joint venture property cash NOI | 4,692 | | 4,957 | | 4,769 | | | 4,579 | | | 3,877 | | 2,551 | | 2,052 | | 1,331 | | | | | | |
Cash NOI | $204,721 | | $207,740 | | $209,474 | | | $211,656 | | | $187,264 | | $90,177 | | $86,739 | | $84,052 | | | | | | |
Pre-merger Legacy HTA NOI | — | | — | | — | | | — | | | 27,114 | | 128,025 | | 127,363 | | 127,253 | | | | | | |
Cash NOI including pre-merger Legacy HTA NOI | $204,721 | | $207,740 | | $209,474 | | | $211,656 | | | $214,378 | | $218,202 | | $214,102 | | $211,305 | | | | | | |
Planned dispositions | (1,453) | | (1,348) | | (2,087) | | | (2,082) | | | (2,058) | | (2,582) | | (2,669) | | (2,614) | | | | | | |
Redevelopment | (2,116) | | (2,455) | | (2,836) | | | (3,187) | | | (3,510) | | (3,605) | | (3,952) | | (4,282) | | | | | | |
Wholly owned and joint venture acquisitions | (13,797) | | (13,396) | | (12,767) | | | (12,056) | | | (10,582) | | (9,152) | | (5,371) | | (1,430) | | | | | | |
Development completions | (1,756) | | (1,513) | | (1,360) | | | (1,312) | | | (1,188) | | (1,158) | | (1,153) | | (621) | | | | | | |
Completed dispositions & assets held for sale | (3,808) | | (6,350) | | (8,790) | | | (12,557) | | | (19,302) | | (23,548) | | (25,648) | | (27,098) | | | | | | |
Merger combined same store cash NOI | $181,791 | | $182,678 | | $181,634 | | | $180,462 | | | $177,738 | | $178,157 | | $175,309 | | $175,260 | | | | | | |
Same store joint venture properties | (2,530) | | (2,619) | | (2,468) | | | (2,433) | | | (2,293) | | (2,429) | | (2,416) | | (2,204) | | | | | | |
Merger combined same store excluding JVs | $179,261 | | $180,059 | | $179,166 | | | $178,029 | | | $175,445 | | $175,728 | | $172,893 | | $173,056 | | | | | | |
1Includes acquisition and pursuit costs, merger-related costs, rent reserves, above and below market ground lease intangible amortization, leasing commission amortization, non-cash adjustments for financing receivables, and ground lease straight-line rent.
2Includes management fee income, interest, above and below market lease intangible amortization, lease inducement amortization, lease termination fees, deferred financing cost amortization and principle related to investment in financing receivable, and tenant improvement overage amortization.
3Includes above and below market intangibles, lease inducements, lease termination fees, deferred financing cost amortization, financing receivable, and TI amortization.
4Includes above and below market ground lease intangible amortization, leasing commission amortization, and ground lease straight-line rent.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 22 |
| | |
NOI Reconciliations |
DOLLARS IN THOUSANDS |
|
| | | | | | | | | | | | | | | | | | | | | | |
RECONCILIATION OF NOI TO FULL QUARTER FFO AND NORMALIZED FFO | | | | | | | |
| 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | | | | | | | | |
Cash NOI | $204,721 | | $207,740 | | $209,474 | | $211,656 | | | | | | | | | |
General and administrative expense | (13,396) | | (15,464) | | (14,935) | | (14,417) | | | | | | | | | |
Straight-line rent | 10,008 | | 9,530 | | 9,782 | | 11,231 | | | | | | | | | |
Interest and other income (expense), net | 139 | | 592 | | 547 | | (1,168) | | | | | | | | | |
Management fees and other income | 1,910 | | 1,860 | | 2,227 | | 2,023 | | | | | | | | | |
Note receivable interest income | 2,262 | | 2,180 | | 1,987 | | 1,943 | | | | | | | | | |
Other non-cash revenue 1 | 2,250 | | 1,918 | | (2,526) | | 3,059 | | | | | | | | | |
Other non-cash expenses 2 | (5,079) | | (4,556) | | (4,336) | | (3,764) | | | | | | | | | |
Non-real estate impairment | — | | — | | (5,196) | | — | | | | | | | | | |
| | | | | | | | | | | | |
Unconsolidated JV adjustments | (337) | (185) | (357) | (143) | | | | | | | | | |
Debt Covenant EBITDA | $202,478 | | $203,615 | | $196,667 | | $210,420 | | | | | | | | | |
Interest expense | (66,304) | | (65,334) | | (63,759) | | (64,443) | | | | | | | | | |
Gain on extinguishment of debt | 62 | | — | | — | | 119 | | | | | | | | | |
Acquisition and pursuit costs | (769) | | (669) | | (287) | | (92) | | | | | | | | | |
Merger-related costs | (7,450) | | 15,670 | | (4,855) | | (10,777) | | | | | | | | | |
Leasing commission amortization 3 | 3,663 | | 3,335 | | 3,002 | | 2,706 | | | | | | | | | |
Non-real estate depreciation and amortization | (1,509) | | (1,525) | | (1,372) | | (1,323) | | | | | | | | | |
Non controlling interest | (841) | (1,027) | (1,067) | (382) | | | | | | | | | |
Unconsolidated JV adjustments | (389) | (377) | (351) | (327) | | | | | | | | | |
FFO | $128,941 | | $153,688 | | $127,978 | | $135,901 | | | | | | | | | |
Acquisition and pursuit costs | 769 | 669 | 287 | 92 | | | | | | | | |
Merger-related costs | 7,450 | (15,670) | 4,855 | 10,777 | | | | | | | | |
Lease intangible amortization | 213 | 240 | 146 | 137 | | | | | | | | |
Significant non-recurring legal fees/forfeited earnest money received | — | 275 | — | 194 | | | | | | | | |
Debt financing costs | (62) | — | — | 625 | | | | | | | | |
Merger-related fair value adjustment | 10,667 | 10,554 | 10,864 | 11,979 | | | | | | | | |
Allowance for credit losses | — | — | 8,599 | — | | | | | | | | |
Unconsolidated JV normalizing items | 90 | 93 | 117 | 96 | | | | | | | | |
Normalized FFO | $148,068 | | $149,849 | | $152,846 | | $159,801 | | | | | | | | | |
1Includes above and below market lease intangibles, interest income related to sales-type leases, lease inducements, lease termination fees, deferred financing cost amortization, and principle related to investment in financing receivable and TI amortization.
2Includes above and below market ground lease intangible amortization, leasing commission amortization, and ground lease straight-line rent.
3Leasing commission amortization is included in the real estate depreciation and amortization add-back for FFO.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 23 |
| | |
EBITDA Reconciliations |
DOLLARS IN THOUSANDS |
|
| | | | | | | | | | | | | | | | | |
RECONCILIATION OF EBITDA | | | | | | | |
| | | | | | |
| 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | | | |
Net income | ($67,844) | | ($82,759) | | ($87,125) | | ($35,764) | | | | |
Interest expense | 66,304 | 65,334 | 63,759 | 64,443 | | | |
Depreciation and amortization | 182,989 | 183,193 | 184,479 | 185,275 | | | |
Unconsolidated JV depreciation,amortization,and interest | 4,810 | 4,789 | 5,192 | 4,339 | | | |
EBITDA | $186,259 | $170,557 | $166,305 | $218,293 | | | |
Leasing commission amortization | 3,663 | 3,335 | 3,002 | 2,706 | | | |
Gain on sales of real estate properties | (48,811) | | (7,156) | | (1,007) | | (73,083) | | | | |
Impairments on real estate properties | 56,873 | 55,215 | 26,227 | 54,452 | | | |
EBITDAre 1 | $197,984 | $221,951 | $194,527 | $202,368 | | | |
EBITDA | $186,259 | $170,557 | $166,305 | $218,293 | | | |
Acquisition and pursuit costs | 769 | 669 | 287 | 92 | | | |
Merger-related costs | 7,450 | | (15,670) | | 4,855 | 10,777 | | | |
Gain on sales of real estate properties | (48,811) | | (7,156) | | (1,007) | | (73,083) | | | | |
Impairments on real estate assets | 56,873 | 55,215 | 26,227 | 54,452 | | | |
Gain on extinguishment of debt | (62) | | — | — | (119) | | | | |
Unconsolidated JV adjustments | — | — | — | 8 | | | |
Debt Covenant EBITDA | $202,478 | $203,615 | $196,667 | $210,420 | | | |
Leasing commission amortization | 3,663 | 3,335 | 3,002 | 2,706 | | | |
Lease intangible amortization | 213 | 240 | 147 | 137 | | | |
Acquisition/disposition timing impact 2 | (2,559) | | (184) | | (945) | | (1,704) | | | | |
Stock based compensation | 2,556 | 3,924 | 3,745 | 3,573 | | | |
| | | | | | | |
Allowance for credit losses 3 | — | — | 8,599 | — | | | |
Rent reserves, net | 442 | | (54) | | 1,371 | (100) | | | |
Unconsolidated JV adjustments | 90 | 93 | 117 | 96 | | | |
Adjusted EBITDA | $206,883 | $210,969 | $212,703 | $215,128 | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
1Earnings before interest, taxes, depreciation and amortization for real estate ("EBITDAre") is an operating performance measure adopted by NAREIT. NAREIT defines EBITDAre equal to “net income (computed in accordance with GAAP) plus interest expense, income tax expense, depreciation and amortization, impairments and minus gains on the disposition of depreciated property.”
2Adjusted to reflect quarterly EBITDA from properties acquired or disposed in the quarter.
3In Q1 2023, allowance for credit losses included a $5.2 million credit allowance for a mezzanine loan included in "Impairment of real estate and credit loss reserves" on the Statement of Income and $3.4 million reserve included in “Rental Income” on the Statement of Income for previously deferred rent and straight line rent for three skilled nursing facilities.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 24 |
| | |
Components of Net Asset Value |
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
CASH NOI BY PROPERTY TYPE |
| 3Q 2023 | |
ASSET TYPE | MERGER COMBINED TOTAL SAME STORE 1 | ACQ./DEV. COMPLETIONS 2 | | REDEVELOPMENT | TIMING/OTHER ADJUSTMENTS 3 | ADJUSTED CASH NOI | | ANNUALIZED ADJUSTED NOI |
MOB/Outpatient | $166,651 | | $14,693 | | | $2,116 | | $1,117 | | $184,577 | | | $738,308 | |
Inpatient/Surgical | 8,078 | | 860 | | | — | | — | | 8,938 | | | 35,752 | |
Office | 7,062 | | — | | | | — | | 7,062 | | | 28,248 | |
Total Cash NOI | $181,791 | | $15,553 | | | $2,116 | | $1,117 | | $200,577 | | | $802,308 | |
| | | | | | | | | | | | | | | | | | | | |
DEVELOPMENT PROPERTIES | | | TOTAL SHARES OUTSTANDING |
Land held for development | $59,871 | | | As of September 30, 2023 8 | 384,903,105 |
Re/development budget | 321,478 | | | | | | |
| $381,349 | | | IMPLIED CAP RATE |
| | | | | STOCK PRICE | IMPLIED CAP RATE |
| | | As of September 30, 2023 8 | $15.27 | 7.6 | % |
OTHER ASSETS | | | | |
Disposition pipeline 4 | $205,776 | | | 3Q 2023 High | $20.15 | 6.5 | % |
Unstabilized properties 5 | 305,288 | | | 3Q 2023 Low | $14.73 | 7.8 | % |
Cash and other assets 6 | 388,984 | | | | | | |
| $900,048 | | | | | | |
| | | | | | |
DEBT | | | | | | |
Unsecured credit facility | $236,000 | | | | | | |
| | | | | | |
Unsecured term loans | 1,500,000 | | | | | | |
Senior notes | 3,699,285 | | | | | | |
Mortgage notes payable | 77,907 | | | | | | |
Company share of joint venture net debt | 12,570 | | | | | | |
Remaining re/development funding | 192,524 | | | | | | |
Other liabilities 7 | 242,573 | | | | | | |
| $5,960,859 | | | | | | |
| | | | | | |
1See NOI Performance schedule on pages 20 - 23 for details on same store NOI. 2Adjusted to reflect quarterly NOI from properties acquired or stabilized re/developments completed during the full eight quarter period that are not included in same store NOI.
3Timing adjustments include current quarter acquisitions as well as re/development completion adjustments totaling $0.2 million, and management fee income of $1.5 million. This is partially offset by $0.6 million of positive NOI for unstabilized properties, which are shown in other assets.
4Includes assets held for sale and planned dispositions.
5Includes 35 properties at their gross book value. These properties were comprised of 1.4 million square feet that generated positive NOI of $0.6 million.
6Includes cash of $24.7 million, notes receivable of $155.0 million, prepaid assets of $104.7 million, accounts receivable of $64.0 million, prepaid ground leases of $19.7 million, and other investments of $6.0 million. In addition, includes the Company's occupied portion of its corporate headquarters in Nashville of $14.9 million.
7Includes only liabilities that are expected to reduce future cash or NOI and that are currently producing non-cash benefits to NOI. Included are accounts payable and accrued liabilities of $206.7 million, security deposits of $31.3 million, and deferred operating expense reimbursements of $4.6 million.
8Total shares outstanding includes OP units.
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 25 |
| | |
Components of Expected FFO |
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
|
| | | | | | | | | | | | | | | | | | | |
|
| | EXPECTED 2023 | ACTUAL |
| | LOW | HIGH | | Q3 2023 | TTM | |
MERGER COMBINED SAME STORE | | | | | | | |
Multi-tenant average absorption (bps) | | 25 | 50 | | 20 | 40 | |
Revenue per occupied square foot | | $36.25 | $37.00 | | $36.72 | $36.04 | |
Cash NOI margin | | 63.5 | % | 64.5 | % | | 62.0 | % | 63.2 | % | |
Cash leasing spreads | | 3.0 | % | 4.0 | % | | 4.8 | % | 3.6 | % | |
Lease retention rate | | 75.0 | % | 90.0 | % | | 76.1 | % | 79.0 | % | |
Cash NOI growth, including Company's share of JVs | | 2.0 | % | 3.0 | % | | 2.3 | % | 2.8 | % | |
| | | | | | | |
ANNUAL EXPECTATIONS | | LOW | HIGH | | YTD | | |
NON-SAME STORE | | | | | | | |
Normalized G&A | | 57,000 | 60,000 | | 43,521 | | |
Straight-line rent, net | | 28,000 | 32,000 | | 24,720 | | |
| | | | | | | |
Funding activity | | | | | | | |
Acquisitions | | $42,950 | $42,950 | | 42,950 | | |
Dispositions to repay asset sale term loan | | 112,460 | 112,460 | | 112,460 | | |
Additional dispositions | | 350,000 | 450,000 | | 318,312 | | |
Re/development | | 100,000 | 125,000 | | 79,941 | | |
1st generation TI and acq. capex | | 40,000 | 50,000 | | 31,141 | | |
Maintenance capex | | | | | | | |
2nd generation TI | | 65,000 | 75,000 | | 47,366 | | |
Leasing commissions paid | | 30,000 | 35,000 | | 21,413 | | |
Capital expenditures | | 45,000 | 50,000 | | 31,949 | | |
Total maintenance capex | | 140,000 | 160,000 | | 100,728 | | |
| | | | | | | |
Cash yield | | | | | | | |
Acquisitions | | 6.0 | % | 6.5 | % | | 6.5 | % | | |
Dispositions | | 6.0 | % | 7.0 | % | | 6.8 | % | | |
Development (stabilized) | | 6.5 | % | 8.0 | % | | | | |
Redevelopment (stabilized) | | 9.0 | % | 12.0 | % | | | | |
| | | | | | | |
| | | | | | | |
Net debt to adjusted EBITDA | | 6.0x | 6.5x | | 6.6x | | |
| | | | | | | |
Net income (loss) attributable to common stockholders per share | | $(0.75) | $(1.00) | | $(0.63) | | |
Normalized FFO per share | | $1.57 | $1.60 | | $1.18 | | |
| | | | | |
| |
HEALTHCARE REALTY | 3Q 2023 SUPPLEMENTAL INFORMATION 26 |
v3.23.3
Cover Page
|
Nov. 03, 2023 |
Cover [Abstract] |
|
Document Type |
8-K
|
Document Period End Date |
Nov. 03, 2023
|
Entity Registrant Name |
Healthcare Realty Trust Incorporated
|
Entity Incorporation, State or Country Code |
MD
|
Entity File Number |
001-35568
|
Entity Tax Identification Number |
20-4738467
|
Entity Address, Address Line One |
3310 West End Avenue, Suite 700
|
Entity Address, City or Town |
Nashville,
|
Entity Address, State or Province |
TN
|
Entity Address, Postal Zip Code |
37203
|
City Area Code |
(615)
|
Local Phone Number |
269-8175
|
Title of 12(b) Security |
Class A Common Stock, $0.01 par value per share
|
Trading Symbol |
HR
|
Security Exchange Name |
NYSE
|
Written Communications |
false
|
Soliciting Material |
false
|
Pre-commencement Tender Offer |
false
|
Pre-commencement Issuer Tender Offer |
false
|
Entity Emerging Growth Company |
false
|
Entity Central Index Key |
0001360604
|
Amendment Flag |
false
|
X |
- DefinitionBoolean flag that is true when the XBRL content amends previously-filed or accepted submission.
+ References
+ Details
Name: |
dei_AmendmentFlag |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionFor the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
+ References
+ Details
Name: |
dei_DocumentPeriodEndDate |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:dateItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
+ References
+ Details
Name: |
dei_DocumentType |
Namespace Prefix: |
dei_ |
Data Type: |
dei:submissionTypeItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionAddress Line 1 such as Attn, Building Name, Street Name
+ References
+ Details
Name: |
dei_EntityAddressAddressLine1 |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- Definition
+ References
+ Details
Name: |
dei_EntityAddressCityOrTown |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionCode for the postal or zip code
+ References
+ Details
Name: |
dei_EntityAddressPostalZipCode |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionName of the state or province.
+ References
+ Details
Name: |
dei_EntityAddressStateOrProvince |
Namespace Prefix: |
dei_ |
Data Type: |
dei:stateOrProvinceItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityCentralIndexKey |
Namespace Prefix: |
dei_ |
Data Type: |
dei:centralIndexKeyItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionIndicate if registrant meets the emerging growth company criteria.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityEmergingGrowthCompany |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
+ References
+ Details
Name: |
dei_EntityFileNumber |
Namespace Prefix: |
dei_ |
Data Type: |
dei:fileNumberItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
+ References
+ Details
Name: |
dei_EntityIncorporationStateCountryCode |
Namespace Prefix: |
dei_ |
Data Type: |
dei:edgarStateCountryItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityRegistrantName |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityTaxIdentificationNumber |
Namespace Prefix: |
dei_ |
Data Type: |
dei:employerIdItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionLocal phone number for entity.
+ References
+ Details
Name: |
dei_LocalPhoneNumber |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 13e -Subsection 4c
+ Details
Name: |
dei_PreCommencementIssuerTenderOffer |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 14d -Subsection 2b
+ Details
Name: |
dei_PreCommencementTenderOffer |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTitle of a 12(b) registered security.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b
+ Details
Name: |
dei_Security12bTitle |
Namespace Prefix: |
dei_ |
Data Type: |
dei:securityTitleItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionName of the Exchange on which a security is registered.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection d1-1
+ Details
Name: |
dei_SecurityExchangeName |
Namespace Prefix: |
dei_ |
Data Type: |
dei:edgarExchangeCodeItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Section 14a -Number 240 -Subsection 12
+ Details
Name: |
dei_SolicitingMaterial |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
+ References
+ Details
Name: |
dei_TradingSymbol |
Namespace Prefix: |
dei_ |
Data Type: |
dei:tradingSymbolItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Securities Act -Number 230 -Section 425
+ Details
Name: |
dei_WrittenCommunications |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
Healthcare Realty (NYSE:HR)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Healthcare Realty (NYSE:HR)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024