Core Insights - Healthcare Realty Trust Incorporated reported a GAAP net loss of $57.738 million, or $0.17 per share, for Q3 2025, an improvement from a net loss of $93.023 million, or $0.26 per share, in Q3 2024 [3][5] - The company achieved a NAREIT FFO of $118.922 million, or $0.34 per share, compared to $77.288 million, or $0.21 per share, in the same quarter last year [3][5] - Normalized FFO for the quarter was $145.340 million, or $0.41 per share, slightly up from $142.049 million, or $0.39 per share, in Q3 2024 [3][5] Leasing Activity - The company executed 333 new and renewal leases totaling 1.6 million square feet during the third quarter [4][5] - Same store cash NOI growth was reported at 5.4%, driven by a 90 basis points increase in occupancy and a tenant retention rate of 88.6% [5][6] - The weighted average lease term was 5.8 years with an average annual escalator of 3.1% [6] Capital Allocation - The company completed asset sales totaling $404 million through 15 transactions during the third quarter [5][11] - Year-to-date sales reached $486 million at a blended cap rate of 6.5%, with an additional $700 million of sales under contract or letter of intent [5][11] - The company increased its 2025 guidance for Normalized FFO per share to a range of $1.59 - $1.61 and same store cash NOI growth to 4.00% - 4.75% [5][10] Balance Sheet - The run-rate Net Debt to Adjusted EBITDA ratio decreased to 5.8x, with expectations to range between 5.4x and 5.7x by year-end [5][7] - The company had approximately $1.3 billion of liquidity as of October [7] Dividend - The Board approved a common stock dividend of $0.24 per share, to be paid on November 21, 2025, to stockholders of record on November 11, 2025 [9] Development and Redevelopment - Significant progress was made on development and redevelopment projects across major markets during the third quarter [7][11] - Notable projects include a $48 million development in Fort Worth, TX, currently 72% leased, and a $19.2 million redevelopment in Charlotte, NC [11] Earnings Call - The company has scheduled a conference call for October 31, 2025, to discuss earnings results and industry trends [13]

Core Insights - The article discusses the current market trends and potential investment opportunities within specific sectors, highlighting the importance of thorough analysis before making investment decisions [1][2][3] Group 1: Market Trends - Recent market fluctuations have created both challenges and opportunities for investors, particularly in technology and healthcare sectors [1] - Analysts emphasize the need for investors to stay informed about macroeconomic factors that could impact market performance [2] Group 2: Investment Opportunities - Certain companies within the renewable energy sector are showing promising growth potential, driven by increasing demand for sustainable solutions [1] - The healthcare industry is also highlighted as a key area for investment, particularly companies involved in innovative treatments and technologies [2] Group 3: Risk Factors - Investors are advised to consider geopolitical risks and regulatory changes that may affect market stability [1] - The article notes that volatility in commodity prices could pose risks to sectors reliant on raw materials [2]

Core Insights - Healthcare Realty Trust Incorporated released its seventh annual Corporate Responsibility Report, detailing its 2024 ESG initiatives and accomplishments [1][2] - The report aligns with the Task Force on Climate-Related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB) [1] ESG Achievements - The company reported a 6.4% decrease in year-over-year energy consumption, a 2.8% decrease in water consumption, and a 10% reduction in Scope 1 and 2 greenhouse gas emissions [5] - Healthcare Realty achieved 22 new green building certifications, increasing the total to 6.3 million square feet [5] - The company received GRESB's 2 Green Star rating with a score of 76, ranking second in its peer group, and maintained a Public Disclosure rating of "A" for five consecutive years [5] Company Overview - Healthcare Realty is a real estate investment trust (REIT) specializing in medical outpatient buildings, with a portfolio of over 600 properties totaling 36 million square feet across 15 growth markets [4]

Core Viewpoint - Healthcare Realty Trust reported its Q2 2025 earnings, showing improved operational performance despite a GAAP net loss per share and a decline in revenue compared to the previous year [1][8]. Financial Performance - Normalized FFO per share was $0.41, exceeding analyst estimates, while GAAP net loss per share was $(0.45) [1][8]. - Revenue for the quarter was $297.502 million, down 5.9% from $316.3 million in Q2 2024 [2]. - Funds Available for Distribution (FAD) was $115.4 million, reflecting a 7.2% increase year-over-year [2][8]. - The quarterly dividend was reduced by 23% to $0.24 per share to enhance sustainability and retained earnings [9][10]. Business Overview and Strategy - The company specializes in owning and managing medical office buildings, focusing on outpatient healthcare facilities leased to leading health systems and physicians [3]. - Strategic priorities include optimizing the property portfolio, improving operational efficiency, and managing the balance sheet [4]. Operational Highlights - Same store cash Net Operating Income (NOI) improved by 5.1%, with occupancy rising to 90% and margins reaching 64.3% [5]. - Tenant retention was at 83%, with health system tenants accounting for 33% of new leasing volume [5][13]. - The company executed 1.5 million square feet of leases, with 452,000 square feet in new agreements [5]. Portfolio Management - The company sold $182.4 million of assets during the quarter, targeting non-core or underperforming assets, with an additional $700 million in sales under contract [6]. - The Net Debt to Adjusted EBITDA ratio improved from 6.4x to 6.0x, with further reductions anticipated by year-end 2025 [6]. Leadership and Governance - Leadership changes included a new President and CEO, along with a streamlined board governance structure [7]. - A comprehensive strategic plan was launched, focusing on margin expansion and disciplined capital allocation [7]. Future Guidance - Full-year Normalized FFO per share guidance was raised to a range of $1.57 to $1.61, with same store cash NOI growth expectations lifted to 3.25% to 4.00% [15]. - The company aims for a Net Debt to Adjusted EBITDA ratio of 5.4x to 5.7x by year-end [15]. - Key themes to monitor include execution of pending asset sales, margin expansion, and operational improvements [16].

PART I - FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company reported a net loss of $205.5 million for H1 2025, with total assets decreasing to $10.24 billion [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $10.24 billion as of June 30, 2025, with total equity declining to $4.88 billion Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total real estate properties, net | $8,674,578 | $9,327,054 | | Assets held for sale, net | $358,207 | $12,897 | | **Total assets** | **$10,235,572** | **$10,650,923** | | Notes and bonds payable | $4,694,391 | $4,662,771 | | **Total liabilities** | **$5,354,146** | **$5,345,049** | | **Total equity** | **$4,877,094** | **$5,301,096** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a net loss of $160.1 million for Q2 2025 and a reduced net loss of $205.5 million for H1 2025 Key Operating Results (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Rental income | $287,070 | $308,135 | $575,927 | $626,211 | | Total Revenues | $297,502 | $316,322 | $596,478 | $643,127 | | Total Expenses | $281,748 | $305,629 | $562,219 | $620,008 | | Impairment of real estate properties | ($142,348) | ($132,118) | ($154,429) | ($148,055) | | Impairment of goodwill | — | — | — | ($250,530) | | **Net loss** | **($160,144)** | **($145,938)** | **($205,532)** | **($461,157)** | | **Diluted EPS** | **($0.45)** | **($0.39)** | **($0.58)** | **($1.22)** | [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Comprehensive loss was $159.8 million for Q2 2025 and $210.7 million for H1 2025, driven by interest rate swaps Comprehensive Loss Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net loss | ($160,144) | ($145,938) | ($205,532) | ($461,157) | | Other comprehensive (loss) income | ($2,008) | $2,229 | ($8,127) | $17,973 | | **Comprehensive loss attributable to common stockholders** | **($159,830)** | **($141,585)** | **($210,657)** | **($436,889)** | [Condensed Consolidated Statements of Equity and Redeemable Non-Controlling Interests](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity%20and%20Redeemable%20Non-Controlling%20Interests) Total stockholders' equity decreased to $4.82 billion by June 30, 2025, due to net loss and common stock dividends - Dividends declared for common stockholders totaled **$0.62 per share** for the six months ended June 30, 2025, resulting in a total distribution of **$217.9 million**[15](index=15&type=chunk) - The net loss attributable to common stockholders for the first six months of 2025 was **$202.7 million**, which directly reduced cumulative net income[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was $211.0 million for H1 2025, with significant cash used in investing and financing activities Cash Flow Summary (in thousands) | Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $211,003 | $244,304 | | Net cash (used in) provided by investing activities | ($41,931) | $151,388 | | Net cash used in financing activities | ($212,330) | ($379,626) | | **(Decrease) increase in cash and cash equivalents** | **($43,258)** | **$16,066** | [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed information on accounting policies, real estate investments, debt, property dispositions, impairment charges, and credit facility refinancing - As of June 30, 2025, the company's portfolio consisted of **559 consolidated real estate properties** totaling approximately **32.2 million square feet**, with gross investments of **$11.2 billion**[18](index=18&type=chunk) - During the first six months of 2025, the company recognized real estate impairment charges totaling **$151.0 million**[36](index=36&type=chunk) - On July 25, 2025, the company entered into a new credit facility, which includes a **$1.5 billion unsecured revolving credit facility** and **$1.115 billion in unsecured term loans**, replacing and extending previous arrangements[71](index=71&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses H1 2025 performance, highlighting revenue decrease, credit facility refinancing, and challenges like rising interest rates [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by rent, property sales, and debt, with a new $1.5 billion credit facility extending maturity to July 2029 - On July 25, 2025, the company entered into a Fifth Amended and Restated Credit Facility, extending the maturity of its **$1.5 billion revolver** to **July 2029**[117](index=117&type=chunk)[131](index=131&type=chunk) - Cash flows from operations in H1 2025 were **not sufficient to fully fund dividends**, primarily due to the timing of interest payments, with the gap covered by the Unsecured Credit Facility[119](index=119&type=chunk) [Investing Activities](index=30&type=section&id=Investing%20Activities) Cash used in investing activities totaled $41.9 million for H1 2025, driven by capital expenditures and property dispositions - Disposed of properties for a total sales price of **$81.2 million** in H1 2025[121](index=121&type=chunk) - Incurred capital costs of **$158.4 million** in H1 2025, with **$75.4 million** for development/redevelopment and **$83.0 million** for tenant improvements and building capital[124](index=124&type=chunk)[127](index=127&type=chunk) [Financing Activities](index=31&type=section&id=Financing%20Activities) Cash used in financing activities was $212.3 million for H1 2025, primarily due to debt repayments and a new credit facility - On May 1, 2025, the company repaid its Senior Notes due 2025 at maturity, including **$250 million** of principal[130](index=130&type=chunk) - In July 2025, the company refinanced its debt with a new facility that includes a **$1.5 billion revolver** (maturing 2029) and five term loan tranches totaling **$1.115 billion**[131](index=131&type=chunk) [Trends and Matters Impacting Operating Results](index=33&type=section&id=Trends%20and%20Matters%20Impacting%20Operating%20Results) Key trends impacting results include rising interest rates, lease expirations, and tenant bankruptcy, with expense increases partially mitigated - Rising interest rates and capital market volatility have **increased the company's cost of capital** and could impact its ability to finance operations and acquisitions[139](index=139&type=chunk) - Prospect Medical, a tenant accounting for **$2.9 million in annual revenue**, filed for **Chapter 11 bankruptcy**[141](index=141&type=chunk) - Approximately **92% of the company's leases** allow for some recovery of operating expenses, mitigating the impact of rising property taxes and utility costs[142](index=142&type=chunk) [Non-GAAP Financial Measures and Key Performance Indicators](index=35&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Key%20Performance%20Indicators) The company uses FFO, Normalized FFO, FAD, and Same Store Cash NOI as key performance indicators, with Normalized FFO at $0.80 per share Non-GAAP Performance Measures (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | FFO attributable to common stockholders | $244,145 | $10,327 | | Normalized FFO attributable to common stockholders | $281,458 | $291,322 | | Normalized FFO per common share - diluted | $0.80 | $0.77 | | FAD | $217,574 | $212,099 | Same Store Cash NOI (in thousands) | Portfolio | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Same store properties (excluding JVs) | $325,785 | $313,126 | +4.0% | | Same store joint venture properties | $8,806 | $9,036 | -2.5% | [Results of Operations](index=39&type=section&id=Results%20of%20Operations) H1 2025 results show decreased rental income and property operating expenses due to dispositions, with G&A expenses rising - **Q2 2025 vs Q2 2024:** - Rental income decreased **6.8%** due to dispositions - Property operating expenses decreased **6.6%**, also from dispositions - G&A expenses increased **67.7%** due to **$10.3 million** in restructuring charges - Interest expense decreased **14.6%** due to lower debt balances[162](index=162&type=chunk)[163](index=163&type=chunk)[165](index=165&type=chunk) - **H1 2025 vs H1 2024:** - Rental income decreased **8.0%** due to dispositions - Property operating expenses decreased **5.8%** - G&A expenses increased **28.6%** due to restructuring charges - Interest expense decreased **12.4%**[171](index=171&type=chunk)[172](index=172&type=chunk)[174](index=174&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risk from interest rate changes on its debt, with no material changes to disclosures since 2024 - There were **no material changes** in market risk disclosures during the six months ended June 30, 2025[179](index=179&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of June 30, 2025, with no material changes to internal control - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the reporting period[181](index=181&type=chunk) - **No material changes** to the company's internal control over financial reporting occurred during the second quarter of 2025[182](index=182&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is not aware of any pending or threatened litigation that would materially affect its financial position - The company is **not aware of any pending or threatened litigation** that would have a **material adverse effect** on its financial condition[183](index=183&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) No new risk factors are presented; investors should refer to the 2024 Annual Report on Form 10-K for detailed risks - Investors are advised to review the risk factors detailed in the company's **2024 Form 10-K**[184](index=184&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase shares under its public plan in H1 2025, with $237.0 million remaining under authorization - The company has **$237.0 million** remaining under its stock repurchase authorization as of June 30, 2025[88](index=88&type=chunk)[185](index=185&type=chunk) - Share purchases during H1 2025 were **solely for satisfying employee tax withholding obligations** related to vested awards and not part of the public repurchase program[185](index=185&type=chunk) [Other Information](index=44&type=section&id=Item%205.%20Other%20Information) The company announced the upcoming departures of Executive Vice President Julie F. Wilson and Senior Vice President John M. Bryant, Jr. - Executive Vice President and Chief Administrative Officer, **Julie F. Wilson**, will depart the company effective **December 31, 2025**[187](index=187&type=chunk) - Senior Vice President, Legal Affairs, **John M. Bryant, Jr.**, will depart the company effective **December 31, 2025**[188](index=188&type=chunk) [Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including credit agreements and CEO/CFO certifications - Key exhibits filed include the **Fifth Amended and Restated Credit and Term Loan Agreement** dated **July 25, 2025**, and **CEO/CFO certifications**[189](index=189&type=chunk)

Financial Data and Key Metrics Changes - Normalized FFO was $0.41 per share, a $0.02 increase from the previous quarter [6] - FAD per share increased to $0.33, representing a 96% payout ratio, a significant improvement from the first quarter [34] - Same store occupancy was 90%, a 40 basis point sequential increase [6] - Same store NOI growth was 5.1%, a 280 basis point sequential increase [6] - Net debt to adjusted EBITDA sits at six times [6] Business Line Data and Key Metrics Changes - The second highest new leasing quarter in the last three years, with year-to-date sales increasing to $211 million at a blended 6.2% cap rate [7] - The company executed nearly 1,500,000 square feet of leases, including over 450,000 square feet of new leases [28] - Current occupancy in the stabilized portfolio is 95%, with NOI margins over 65% [18] Market Data and Key Metrics Changes - Demand for outpatient medical space remains strong, driven by tightening supply and the ongoing migration of services into a lower-cost outpatient setting [28] - The company has a robust and balanced disposition pipeline, expecting asset sales of approximately $1 billion to close in 2025 at a blended cap rate of 7% [21] Company Strategy and Development Direction - The strategic plan, referred to as Healthcare Realty 2.0, focuses on an operations-oriented culture prioritizing earnings growth and strong tenant relationships [12] - Key action items include improved corporate governance, significant organizational restructuring, portfolio optimization, reprioritizing capital allocation, and improving the balance sheet [12][21] - The company aims to invest approximately $300 million over the next three years into the lease-up portfolio to drive NOI growth [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a 92% to 93% occupancy rate, citing improved macro conditions and a revamped asset management platform [88][90] - The company anticipates a positive earnings outlook and plans to utilize free cash flow to invest accretively in its portfolio [26][27] Other Important Information - The Board approved a dividend reduction of 23% to $0.24 per share on a quarterly basis to alleviate pressure from $1.4 billion of low coupon bonds maturing over the next three years [24] - The company has successfully completed the first phase of its derisking strategy, extending the maturity of its revolver and term loans [37] Q&A Session Summary Question: Can you talk about the composition of the lease-up portfolio? - Management indicated that the lease-up portfolio consists of properties primarily located in priority markets, with strong demographic trends supporting the potential for growth [42][46] Question: What is the expected upside in the lease-up portfolio? - Management clarified that the total upside is estimated at $50 million, with the majority coming from leasing up vacant space rather than solely from redevelopment [80] Question: How confident is the company in achieving the targeted occupancy rates? - Management expressed confidence based on improved market conditions and a strategic focus on asset management, expecting to see occupancy gains in the coming quarters [90][92] Question: What are the plans for capital allocation in the lease-up portfolio? - Management plans to invest $300 million over three years, focusing on ready-to-occupy suites and redevelopment opportunities to drive higher occupancy and rental rates [22][81] Question: How will the company manage the impact of asset dispositions on earnings? - Management acknowledged that while there may be some dilution from asset sales, they are implementing cost-cutting measures and focusing on revenue growth to offset this impact [99][105]

Financial Data and Key Metrics Changes - Normalized FFO was $0.41 per share, a $0.02 increase from the previous quarter [6] - FAD per share increased to $0.33, representing a 96% payout ratio, a significant improvement from the first quarter [36] - Same store occupancy was 90%, a 40 basis point sequential increase [6] - Same store NOI growth was 5.1%, a 280 basis point sequential increase, marking the highest growth in nine years [36] - Net debt to adjusted EBITDA sits at six times, expected to decrease to the mid-five times area by year end [24][39] Business Line Data and Key Metrics Changes - The second highest new leasing quarter in the last three years, with year-to-date sales increasing to $211 million at a blended 6.2% cap rate [7] - Current occupancy in the stabilized portfolio is 95%, with NOI margins over 65% [17] - The lease-up portfolio, comprising approximately 13% of total assets, has a current occupancy of 70% and NOI margins of 55% [19] - The disposition portfolio, approximately 12% of total assets, has lagged in NOI growth by 700 basis points compared to the stabilized portfolio [20] Market Data and Key Metrics Changes - Demand for outpatient medical space remains strong, driven by tightening supply and the ongoing migration of services into lower-cost outpatient settings [30] - The signed not occupied pipeline (SNO) remains solid at nearly 610,000 square feet, representing almost 170 basis points of occupancy in the coming quarters [31] - The new lease pipeline is over 1,300,000 square feet and growing, with about 60% in the letter of intent or lease documentation phase [32] Company Strategy and Development Direction - The strategic plan, Healthcare Realty 2.0, focuses on an operations-oriented culture prioritizing earnings growth and strong tenant relationships [12] - Key action items include improved corporate governance, significant organizational restructuring, portfolio optimization, reprioritizing capital allocation, and improving the balance sheet [12][22][24] - The company aims to invest approximately $300 million over the next three years into the lease-up portfolio to drive NOI growth [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a 92% to 93% occupancy rate, citing improved macro conditions and a revamped asset management platform [91][92] - The company anticipates further leasing momentum and NOI growth throughout the remainder of the year and into 2026 [34] - Management acknowledged the need for a dividend reduction of 23% to $0.24 per share to alleviate pressure from maturing bonds and to reinvest capital into the portfolio [25] Other Important Information - The company completed $211 million of asset sales through July, raising the full-year disposition outlook to $800 million to $1 billion [37] - The company has reduced the size of its board from 12 to 7 directors to bring fresh perspectives and support value creation initiatives [12] - The company has achieved initial goals of at least $10 million in run-rate G&A savings through headcount reduction and office expense savings [15] Q&A Session Summary Question: Can you talk about the composition of the lease-up portfolio? - Management indicated that the lease-up portfolio consists of both multi-tenant and single-tenant properties, with a total upside potential of $50 million, which will be phased in over time [44][46] Question: What is the confidence level in achieving the targeted occupancy rates? - Management cited improved macro conditions and a revamped asset management platform as key factors contributing to confidence in achieving 92% to 93% occupancy [90][92] Question: How will the company fund the capital investments in the lease-up portfolio? - Management clarified that the $300 million required to achieve the $50 million NOI upside will primarily come from the dividend adjustment, with potential use of sale proceeds for earlier investments [48][50] Question: What are the dynamics behind the higher cap rates for the assets being sold? - Management explained that the disposition portfolio is characterized by lower occupancy and older vintage assets, contributing to the higher blended cap rate of 7% [78] Question: How does the company plan to drive incremental growth from the core portfolio? - Management emphasized the importance of maximizing lease economics, with escalators trending upwards and a focus on tenant retention to drive earnings growth [111][113]

Financial Performance & Guidance - The company raised its NFFO guidance range by $0.01, to $1.57 - $1.61 per share for 2025[7] - NFFO per share sequentially improved by $0.02 to $0.41 per share, and FAD per share sequentially improved by $0.04 to $0.33 per share[8, 10] - Same-store cash NOI growth was 5.1%, a sequential increase of 2.8%[8] - The company completed or has under contract/LOI approximately $900 million in asset sales year-to-date[10] Strategic Plan & Portfolio Optimization - The company is implementing a strategic plan to improve operational performance, optimize the portfolio, and re-establish credibility[13] - The company has segmented its portfolio into three categories: Stabilized (approximately 75% of the total portfolio), Lease-Up (approximately 13%), and Disposition (approximately 12%)[15, 36] - The company plans to dispose of approximately $1.2 billion in assets[48] - The stabilized portfolio has approximately 95% occupancy and generates approximately $550 million in NOI[36, 37] - The lease-up portfolio has approximately 70% occupancy and approximately $90 million in NOI, with a potential to unlock up to $50 million in incremental NOI[36, 43, 45] Restructuring & Efficiencies - The company is restructuring its organizational platform to enhance focus and accountability, targeting over $10 million in annual savings[15] - The company identified G&A efficiencies to bring HR in line with peers, improve margins, and create long-term shareholder value, targeting $10 million of G&A reduction[35] Balance Sheet & Capital Allocation - The company is targeting a mid-5x Net Debt / EBITDA and a 5-year weighted average debt maturity[15] - The company reduced the dividend by 23% to $0.24 per share on a quarterly basis to fund high-return capital investments[77]

Group 1 - Healthcare Realty Trust (HR) reported $297.5 million in revenue for the quarter ended June 2025, reflecting a year-over-year decline of 6% [1] - The earnings per share (EPS) for the same period was $0.41, compared to -$0.39 a year ago, indicating a significant improvement [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $298.38 million, resulting in a surprise of -0.3% [1] Group 2 - Rental income was reported at $287.07 million, which was lower than the estimated $289.41 million, representing a year-over-year decline of 6.8% [4] - Interest income came in at $3.45 million, below the average estimate of $3.9 million, marking a year-over-year decrease of 10.8% [4] - Other operating revenues were reported at $6.98 million, exceeding the average estimate of $5.42 million, showing a year-over-year increase of 61.6% [4] Group 3 - The stock of Healthcare Realty Trust has returned -3.1% over the past month, contrasting with the Zacks S&P 500 composite's +2.7% change [3] - The company currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Performance - Healthcare Realty Trust (HR) reported quarterly funds from operations (FFO) of $0.41 per share, exceeding the Zacks Consensus Estimate of $0.40 per share, and up from $0.38 per share a year ago, representing an FFO surprise of +2.50% [1] - The company posted revenues of $297.5 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.3%, and down from year-ago revenues of $316.32 million [2] - Over the last four quarters, the company has surpassed consensus FFO estimates three times and topped consensus revenue estimates two times [2] Market Performance - Healthcare Realty Trust shares have declined approximately 8.2% since the beginning of the year, while the S&P 500 has gained 8.2% [3] - The current consensus FFO estimate for the coming quarter is $0.40 on revenues of $299.89 million, and for the current fiscal year, it is $1.58 on revenues of $1.2 billion [7] Industry Outlook - The REIT and Equity Trust - Other industry is currently in the top 36% of over 250 Zacks industries, indicating a favorable outlook as the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]