Group 1 - The market is currently viewing AI as a significant catalyst for stock performance, with expectations of increased productivity and reduced costs [1] - High Yield Landlord is positioning itself for future investment opportunities, particularly focusing on REITs, and offers a range of investment portfolios and real-time transaction updates [1] - Jussi Askola, the President of Leonberg Capital, has extensive experience in REIT investing and leads the High Yield Landlord investment group, which provides direct access to analysts for inquiries [1]

Real Estate Investments - The Company had gross investments of approximately $10.3 billion in 502 consolidated real estate properties as of December 31, 2025[10]. - The total real estate investments amounted to $10.29 billion with an occupancy rate of 90.4% across 502 properties[10]. - The Company’s total investments, including unconsolidated joint ventures, amounted to approximately $10.7 billion as of December 31, 2025[10]. - The occupancy rate for medical office/outpatient properties was 89.6%, while inpatient properties had a 100% occupancy rate as of December 31, 2025[10]. - The Company’s properties are primarily located on or near acute care hospital campuses, aiming to reduce financial and operational risk by focusing on high-growth markets[19]. - As of December 31, 2025, the Company had 5,730 leases covering a total of 25,988,658 square feet[16]. - The weighted average remaining years to expiration of the Company's leases was approximately 4.4 years as of December 31, 2025[15]. - The Company’s real estate portfolio is leased to a diverse tenant base, with no single tenant accounting for 10% or more of consolidated revenues for the year ended December 31, 2025[14]. Property Dispositions and Development - In 2025, the Company disposed of 70 properties for total sales prices of approximately $1.1 billion, yielding net cash proceeds of about $1.0 billion[20]. - The Company funded $136.6 million toward the development and redevelopment of properties in 2025[21]. - The weighted average capitalization rate for property sales in 2025 was 6.7%[20]. Liquidity and Financial Management - The Company expects to meet its liquidity needs through cash on hand, cash flows from operations, asset sales, and equity and debt issuances[18]. - The Company is subject to numerous federal, state, and local environmental laws that could impose significant liabilities related to hazardous substances[32]. Employee and Workforce Management - The Company employed 539 people as of December 31, 2025, focusing on diversity and inclusion in its workforce[36]. - The Company offers a dollar-for-dollar match on 401(k) contributions up to $2,800, encouraging higher employee savings[41]. - The Company pays 100% of long-term disability and life insurance premiums, and provides tuition reimbursement up to $3,000 annually for employees pursuing higher education[41]. - The Company offers health benefits and 401(k) eligibility starting on the first day of employment, with a dollar-for-dollar match on 401(k) contributions up to $2,800[41]. Environmental, Social, and Governance (ESG) Practices - The Company has adopted various frameworks for ESG performance, including participation in the annual GRESB Assessment[41]. - The Company's Board of Directors is committed to overseeing the integration of ESG principles throughout the Company, with executive officers' incentive programs including ESG performance measures[40]. - The Company aims to drive positive impact while mitigating risk and creating long-term value for stakeholders, including tenants, investors, employees, and communities[42]. - The Company is working toward expanding its climate risk and resiliency strategies in alignment with the Task Force on Climate-Related Disclosure[43]. - The Company participates in the annual GRESB Assessment and aligns its reporting disclosures with the Sustainability Accounting Standards Board[41]. Corporate Governance - The Company makes its Proxy Statement, Annual Report on Form 10-K, and Quarterly Reports on Form 10-Q available to the public free of charge on its website[44]. - The Company has adopted Corporate Governance Principles relating to the conduct and operations of the Board of Directors, which are available on its website[45]. - The Board of Directors has established an Audit Committee, Compensation and Human Capital Committee, and Nominating and Corporate Governance Committee, with written charters posted online[46]. - Information regarding the executive officers of the Company is available in Part III, Item 10 of the report[47]. Competition and Market Position - The Company faces competition from various entities in acquiring and developing healthcare properties, which may affect its operational results[23].

Core Insights - Healthcare Realty Trust has successfully completed its three-year strategic plan ahead of schedule, achieving significant operational improvements and financial metrics [3][6][19] - The company reported a normalized FFO of $1.61 per share for 2025, exceeding original guidance, with same-store NOI growth of 4.8% [8][9][6] - Management emphasized disciplined capital allocation, focusing on redevelopment projects, stock buybacks, and selective joint ventures [5][14][15] Financial Performance - The company achieved a $10 million reduction in general and administrative expenses, bringing total G&A to $45 million [1][6] - For 2026, normalized FFO is guided to be between $1.58 and $1.64 per share, reflecting approximately 5% core earnings growth [4][15] - Same-store cash NOI growth is expected to be between 3.5% and 4.5% for 2026 [16] Operational Improvements - The asset management platform revamp has led to a 60 basis point improvement in cash leasing spreads and a 220 basis point increase in tenant retention [2][6] - The company executed approximately 5.8 million square feet of leases in 2025, with a retention rate of 82% [10][11] - Occupancy gains were driven by nearly 290,000 square feet of same-store absorption, resulting in over 100 basis points of occupancy improvement [11][13] Capital Structure and Allocation - The net debt to EBITDA ratio improved to 5.4x, with stable rating outlooks from Moody's and S&P [5][7] - The company plans to refinance a $600 million bond mid-year at a target coupon in the low 5% range [4][17] - Stock repurchases totaled $50 million in January, with $450 million remaining under the current authorization [14][15] Market Positioning - Healthcare Realty Trust has exited 14 non-core markets, focusing on higher-growth metropolitan statistical areas (MSAs) [7][6] - The company maintains a leasing pipeline of 1.3 million square feet, with strong demand in the top 100 MSAs [13][10] - Management highlighted ongoing relationships with health system partners, indicating a robust dialogue with major healthcare providers [13][10]

Core Insights - The company has improved cash leasing spreads by 60 basis points and tenant retention by 220 basis points, leading to enhanced lease IRRs and payback periods, ultimately resulting in higher quality earnings and growth [1] - The company achieved a target of $10 million in G&A savings, with total G&A expenses now at $45 million, which is competitive compared to peers [1] - The asset disposition plan has been successfully completed, with $1.2 billion in assets sold at a blended cap rate of 6.7%, exceeding expectations [3] Financial Performance - For 2025, normalized FFO was $1.61 per share, surpassing guidance by $0.03, and same-store NOI growth was 4.8%, exceeding guidance by 140 basis points [5][19] - The company executed approximately 5.8 million square feet of leases in 2025, with a strong start to 2026 and high engagement with health systems [5][10] - The balance sheet has improved significantly, with net debt to EBITDA reduced to 5.4x and an outlook upgraded to Stable by Moody's and S&P [3][19] Strategic Initiatives - The company has revamped its asset management platform and leadership team, enhancing alignment between asset management and leasing [2] - A disciplined capital allocation strategy is in place, focusing on redevelopments with attractive yields, stock buybacks, and joint ventures [7][8] - The company anticipates same-store cash NOI growth of 3.5% to 4.5% for 2026, with a normalized FFO guidance of $1.58 to $1.64 per share [21] Market Position and Trends - Demand for outpatient medical services is increasing, driven by health systems investing in outpatient services, while supply remains constrained [12][46] - The company is well-positioned in high-growth MSAs, having exited noncore markets and improved its geographic footprint [3] - The leasing activity is supported by strong tenant retention rates, with nearly 83% retention and significant occupancy gains in redevelopment properties [11][14] Governance and Leadership - The company has streamlined its board to seven members, enhancing corporate governance and leadership quality [4] - The new CFO brings extensive financial acumen and experience in the healthcare REIT sector, contributing to the company's strategic direction [4][18]

Financial Data and Key Metrics Changes - In Q4 2025, normalized FFO per share was $0.40, with full-year normalized FFO per share reaching $1.61, exceeding the midpoint of original guidance by $0.03 [10][23] - Same-store cash NOI growth for 2025 was 4.8%, surpassing the midpoint of original guidance by 140 basis points [11][23] - The company achieved a quarterly dividend payout ratio of 75% with FAD per share at $0.32 [23] Business Line Data and Key Metrics Changes - The company executed approximately 5.8 million sq ft of leases in 2025, including 1.6 million sq ft of new leases [15][11] - Tenant retention improved to 82% for the year, with same-store absorption translating to over 100 basis points of occupancy gain [15][16] - Cash leasing spreads improved by 3.7% in Q4, contributing to overall positive lease economics [23] Market Data and Key Metrics Changes - The outpatient medical transaction volume increased significantly in 2025, driven by rising patient and tenant demand amid a lack of new supply [11][12] - Demand in the top 100 MSAs continues to outstrip supply, with completions as a percentage of inventory remaining near all-time lows [16] Company Strategy and Development Direction - The company aims to become a leader in the outpatient medical sector, focusing on enhancing its asset management platform and improving alignment between asset management and leasing [5][7] - A three-year strategic plan was published in July, with key steps to overhaul the organization, including achieving $10 million in G&A savings and completing an ambitious asset disposition plan [6][8] - The company plans to prioritize redevelopment projects within its existing portfolio, targeting attractive yields on cost of approximately 10% [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial flexibility and balance sheet capacity for capital allocation, with a stable outlook from credit rating agencies [9][24] - The company anticipates same-store cash NOI growth of 3.5%-4.5% for 2026, with a focus on maintaining financial discipline around leasing and improving tenant satisfaction [25][31] - Management acknowledged the challenges posed by the current cost of capital and discount to intrinsic asset value, emphasizing a disciplined capital allocation approach [11][12] Other Important Information - The company has reduced net debt to EBITDA to 5.4x, down from 6.4x at the beginning of the year, ahead of target [24] - The dividend has been right-sized to be appropriate and well-covered, currently offering a nearly 6% yield to shareholders [10] Q&A Session Summary Question: Same-store NOI guidance for 2026 - Management explained that the 3.5%-4.5% guidance reflects a deceleration from 2025's strong performance, with expectations for continued positive absorption and retention trends [30][31] Question: CapEx relative to FAD expectations for 2026 - Management indicated that if FFO remains flat, FAD is also expected to be flat, with maintenance capital numbers provided in guidance to assist modeling [36][38] Question: Absorption potential and redevelopment project timing - Management confirmed that the absorption figures discussed were specific to the same-store portfolio, with redevelopment expected to significantly contribute to total portfolio occupancy in the coming years [40][41] Question: Acquisition potential and profile - Management stated that any acquisitions would be pursued only if they meet the company's yield criteria, emphasizing a disciplined approach to capital allocation [43][46] Question: Disposition strategy moving forward - Management outlined that $175 million of sales are embedded in guidance for the year, with a focus on maximizing shareholder value through potential sales of non-core assets [49][50]

Financial Data and Key Metrics Changes - The company reported normalized FFO per share of $1.61 for the full year 2025, exceeding the midpoint of original guidance by $0.03 [10] - Same-store NOI growth was 4.8%, surpassing the midpoint of original guidance by 140 basis points [11] - In Q4 2025, normalized FFO per share was $0.40, with same-store cash NOI growth of 5.5% [23] Business Line Data and Key Metrics Changes - The company executed approximately 5.8 million square feet of leases in 2025, including 1.6 million square feet of new leases [15] - Tenant retention improved to 82% for the year, with same-store absorption translating to over 100 basis points of occupancy gain [15][16] - Cash leasing spreads improved by 60 basis points, and tenant retention increased by 220 basis points under the new asset management platform [8] Market Data and Key Metrics Changes - The outpatient medical transaction volume increased significantly in 2025, driven by rising patient and tenant demand alongside a lack of new supply [11] - Demand in the top 100 MSAs continues to outstrip supply, with completions as a percentage of inventory remaining near all-time lows [16] Company Strategy and Development Direction - The company aims to become the leader in the outpatient medical sector, focusing on driving long-term shareholder value through a three-year strategic plan [5][6] - Key initiatives include revamping the asset management platform, achieving G&A savings, and executing an ambitious asset disposition plan [7][8] - The company has successfully sold $1.2 billion of assets at a blended cap rate of 6.7%, exceeding expectations [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's premier outpatient medical portfolio, supported by nearly 5% same-store NOI growth in 2025 [9] - The outlook for 2026 includes normalized FFO guidance of $1.58-$1.64 per share, with same-store cash NOI growth expected to be 3.5%-4.5% [25] - Management acknowledged the need for disciplined capital allocation due to current cost of capital and discount to intrinsic asset value [11] Other Important Information - The company has reduced net debt to EBITDA to 5.4 times, improving financial flexibility and liquidity [9] - The dividend has been right-sized to be appropriate and well-covered, currently offering a nearly 6% yield [10] Q&A Session Summary Question: Same-store NOI guidance for 2026 - Management explained that the 3.5%-4.5% guidance reflects expectations for escalators, retention, absorption, and cash leasing spreads, with a focus on pushing these metrics [31][32] Question: CapEx relative to FAD for 2026 - Management indicated that if FFO is flat, FAD is also expected to be flat, with maintenance capital numbers provided in guidance [36][38] Question: Absorption potential and redevelopment leasing - Management confirmed that the absorption figures discussed were for the same-store pool, with expectations for significant contributions from redevelopment projects [40][42] Question: Acquisition potential and profile - Management stated that any acquisitions would be pursued only if they meet yield expectations, emphasizing discipline in capital allocation [44][46] Question: Dispositions going forward - Management outlined a plan for $175 million in sales for the year, with some deals expected to close early in 2026 [49][50]

Financial Data and Key Metrics Changes - The company reported normalized FFO per share of $1.61 for the full year 2025, exceeding the midpoint of original guidance by $0.03 [9] - Same-store NOI growth was 4.8%, surpassing the midpoint of original guidance by 140 basis points [10] - In Q4 2025, normalized FFO per share was $0.40, with same-store cash NOI growth of 5.5% [22] Business Line Data and Key Metrics Changes - The company executed approximately 5.8 million sq ft of leases in 2025, including 1.6 million sq ft of new leases [13] - Tenant retention improved to 82% for the year, with same-store absorption translating to over 100 basis points of occupancy gain [13][14] - Cash leasing spreads improved by 60 basis points, and tenant retention increased by 220 basis points under the new asset management platform [6] Market Data and Key Metrics Changes - The company exited 14 non-core markets, improving its geographic footprint into high-growth MSAs [7] - Demand in the top 100 MSAs continues to outstrip supply, with completions as a percentage of inventory remaining near all-time lows [15] Company Strategy and Development Direction - The company aims to become the clear leader in the outpatient medical sector, focusing on long-term shareholder value [4] - A three-year strategic plan was published in July, with key steps to overhaul the organization, including a revamp of the asset management platform and a successful asset disposition plan [5][6] - The company plans to prioritize redevelopment projects within its existing portfolio, targeting attractive yields on cost of approximately 10% [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's premier outpatient medical portfolio, supported by nearly 5% same-store NOI growth in 2025 [7] - The outlook for 2026 includes normalized FFO per share guidance of $1.58-$1.64, with same-store cash NOI growth expected to be between 3.5%-4.5% [24] - Management acknowledged the need for disciplined capital allocation due to current cost of capital and discount to intrinsic asset value [10] Other Important Information - The company successfully achieved a target of $10 million run rate G&A savings, with total G&A expenses now at $45 million [6] - The dividend was right-sized, offering a nearly 6% current yield to shareholders [9] Q&A Session Summary Question: Same-store NOI guidance for 2026 - Management explained that the 3.5%-4.5% guidance reflects expectations for escalators, retention, absorption, and cash leasing spreads, with a focus on pushing these metrics [30][31] Question: CapEx relative to FAD for 2026 - Management indicated that if FFO is flat, FAD is also expected to be flat, with maintenance capital numbers provided in guidance [36][38] Question: Absorption potential and redevelopment leasing - Management confirmed that the absorption figures discussed were for the same-store pool, with expectations for redevelopment projects to drive total portfolio occupancy increases [40][42] Question: Acquisition potential and profile - Management stated that any acquisitions would be pursued only if they meet yield expectations, emphasizing discipline in capital allocation [44][46] Question: Disposition plans going forward - Management outlined that $175 million of sales are embedded in guidance for the year, with some sales expected to close early in 2026 [48] Question: Changes in office repositionings and shadow supply - Management noted no significant changes in shadow supply affecting their markets, focusing on health system leasing [78] Question: Balance sheet and debt mix - Management indicated a target of mid-single digits to upper single digits for floating rate debt, emphasizing balance sheet efficiency [80]

4Q2025 Supplemental Information FURNISHED AS OF FEBRUARY 12, 2026 - UNAUDITED FORWARD LOOKING STATEMENTS & RISK FACTORS This Supplemental Information report contains disclosures that are "forward-looking statements." 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 such as "may," "will," "expect," "believe," "anticipate," "target," "intend," "plan," "estimate," "project," "continue," "should," "could," "budge ...

Financial Performance - GAAP Net Income for Q4 2025 was $0.04 per share, with NAREIT FFO at $0.36 per share and Normalized FFO at $0.40 per share[10]. - Net income attributable to common stockholders for Q4 2025 was $14,391 thousand, compared to a loss of $106,846 thousand in Q4 2024, indicating a significant improvement[40]. - Basic earnings per common share for Q4 2025 was $0.04, recovering from a loss of $0.31 in Q4 2024[40]. - Net income for Q4 2025 was $14,591, compared to a loss of $58,544 in Q3 2025 and a loss of $160,144 in Q2 2025[107]. - EBITDA for Q4 2025 was $198,609, significantly higher than $139,374 in Q3 2025 and $117,376 in Q4 2024[110]. Revenue and Income - Rental income for Q4 2025 was $274,731 thousand, down from $300,065 thousand in Q4 2024, representing a year-over-year decrease of about 8.43%[40]. - Total rental income for Q4 2025 was $274,731, down from $287,399 in Q3 2025 and $300,065 in Q4 2024[107]. - Total cash NOI for Q4 2025 was $178,459, a decrease from $184,413 in Q3 2025 and $188,775 in Q4 2024[107]. - Same store cash NOI for Q4 2025 was $157,917, up from $155,929 in Q3 2025 and $149,730 in Q4 2024[107]. - Year-over-year revenue growth for same store properties was 4.9%, with base revenue increasing by 4.7%[99]. Debt and Liabilities - The company reduced net debt to adjusted EBITDA to 5.4x, down from 6.1x at the prior year end[10]. - Total liabilities decreased to $4,534,236 thousand in Q4 2025 from $5,114,801 thousand in Q3 2025, a reduction of approximately 11.34%[38]. - Total debt as of Q4 2025 was $3,911,423, a decrease from $4,485,706 in Q3 2025[110]. - The company has a leverage ratio of 36.8%, which is below the covenant requirement of not greater than 60%[59]. - The fixed charge coverage ratio stands at 3.4x, exceeding the minimum requirement of 1.50x[59]. Asset Management - Total asset sales for 2025 reached $1.2 billion through 34 transactions at a blended cap rate of 6.7%[10]. - The company completed strategic market exits, selling a 25-property portfolio for $348.9 million to reduce exposure to non-priority markets[14]. - Total real estate investments decreased to $10,292,596 thousand in Q4 2025 from $10,391,060 thousand in Q3 2025, a decline of approximately 1.05%[38]. - The company reported a gain on sales of real estate properties of $135,711 thousand in Q4 2025, significantly higher than $32,082 thousand in Q4 2024[40]. - The company completed dispositions and assets held for sale totaling $10,500 in Q4 2025, down from $18,183 in Q3 2025[107]. Leasing and Occupancy - Same store cash NOI growth for 2025 was +4.8%, driven by a tenant retention rate of 81.5% and cash leasing spreads of +3.1%[10]. - The company executed 1.5 million square feet of leases in Q4 2025, including 316,000 square feet of new leases, with a weighted average lease term of 6.2 years[13]. - The portfolio occupancy rate reached 92.4% in Q4 2025, compared to 91.3% in Q4 2024[96]. - Total number of leases was 5,706, with an average WALT of 99.8 months[92]. - Tenant retention rate improved to 82.7% in Q4 2025 from 81.5% in 2025[90]. Future Guidance - 2026 guidance estimates earnings per share to range from $(0.05) to $0.05, with NAREIT FFO per share expected between $1.44 and $1.50[18]. - Same store cash NOI growth is projected to be between 3.5% and 4.5% for 2026[120]. - Total sources of funds for the company are estimated at $875 million, including $600 million from bond issuance[122]. - Interest expense is projected to be between $135 million and $145 million for 2026[121]. - The company plans to repurchase shares totaling $50 million in January 2026[123].

Core Viewpoint - Healthcare Realty Trust Incorporated has established its inaugural commercial paper program, allowing the issuance of up to $600 million in short-term, unsecured commercial paper notes [1]. Group 1: Commercial Paper Program - The commercial paper program enables Healthcare Realty Holdings, L.P. to issue notes that will rank pari passu with other senior unsecured indebtedness [1]. - The notes will be fully and unconditionally guaranteed by Healthcare Realty Trust Incorporated [1]. - Proceeds from the notes will be utilized for general corporate purposes [1]. Group 2: Company Overview - Healthcare Realty Trust Incorporated is the largest, pure-play owner, operator, and developer of medical outpatient buildings in the United States [3].