[Highlights](index=7&type=section&id=Highlights) This section summarizes the company's strong Q2 2025 financial and operational performance, strategic initiatives, and updated financial guidance [Second Quarter 2025 Financial and Operating Results](index=7&type=section&id=SECOND%20QUARTER%202025%20RESULTS) In Q2 2025, Healthcare Realty reported a GAAP Net Loss of $(0.45) per share and a Normalized FFO of $0.41 per share, driven by strong operational performance and raised guidance Q2 2025 Financial Results vs. Q2 2024 (in thousands, except per share amounts) | (in thousands, except per share amounts) | THREE MONTHS ENDED JUNE 30, 2025 | THREE MONTHS ENDED JUNE 30, 2024 | | :--- | :--- | :--- | | GAAP Net loss | $(157,851) | $(143,780) | | GAAP Net loss per share | $(0.45) | $(0.39) | | NAREIT FFO, diluted | $120,371 | $123,797 | | NAREIT FFO per share, diluted | $0.34 | $0.33 | | Normalized FFO, diluted | $143,736 | $143,500 | | Normalized FFO per share, diluted | $0.41 | $0.38 | - Improved same store operating metrics including cash NOI growth of **+5.1%**, a **40 bps** sequential increase in occupancy to **90.0%**, and **+3.3%** cash leasing spreads[9](index=9&type=chunk) - Increased full-year 2025 guidance for Normalized FFO per share by **$0.01** at the midpoint to **$1.57 - $1.61** and for Same Store Cash NOI growth by **25 bps** to **3.25% - 4.00%**[9](index=9&type=chunk) [Leasing, Disposition, and Balance Sheet Activity](index=8&type=section&id=LEASING%20ACTIVITY) The company executed 1.5 million square feet of leases and completed $210.5 million in year-to-date asset sales, reducing leverage and extending credit facilities - Executed 341 new and renewal leases totaling **1.5 million square feet** in Q2, with a weighted average lease term of **5.3 years** and an average annual escalator of **3.2%**[11](index=11&type=chunk)[14](index=14&type=chunk) - Completed **$182.4 million** in asset sales during Q2 and through July. Year-to-date sales total **$210.5 million** at a **6.2%** blended cap rate, with an additional **$700 million** under contract or LOI[9](index=9&type=chunk)[12](index=12&type=chunk) - Debt paydown from asset sales reduced run-rate Net Debt to Adjusted EBITDA to **6.0x**. The company extended its **$1.5 billion** revolver to 2030 and obtained extensions on term loans, reducing debt maturing through 2026 from **$1.5 billion** to **$600 million**[12](index=12&type=chunk)[13](index=13&type=chunk) [Strategic Plan and Leadership Updates](index=9&type=section&id=STRATEGIC%20PLAN%20PRESENTATION) The company implemented a new Strategic Plan to optimize its portfolio and operations, initiating a platform restructuring with new hires and senior leadership changes - A new Strategic Plan has been implemented to improve operational performance, optimize the portfolio, and maximize shareholder value[16](index=16&type=chunk) - Commenced a platform restructuring, hiring industry veterans Tony Acevedo and Glenn Preston as SVPs of Asset Management to lead a new operations-centric model[17](index=17&type=chunk)[19](index=19&type=chunk) - Julie Wilson, EVP – Chief Administrative Officer, will depart at year-end after a 24-year career, along with other senior leaders impacted by the restructuring[18](index=18&type=chunk) [Dividend and Financial Reporting](index=9&type=section&id=DIVIDEND) The Board approved a 23% dividend reduction to $0.24 per share to improve the FAD payout ratio and retain capital, while also aligning financial reporting with market norms - The dividend was reduced by **23%** to **$0.24 per share**. This change lowers the FAD payout ratio to about **80%** and is intended to mitigate refinancing risk and retain **$100 million** annually for reinvestment[19](index=19&type=chunk)[20](index=20&type=chunk) - The company began using the Carrying Value of its debt for leverage calculations, which reduced the Q2 Net Debt to Adjusted EBITDA by approximately **0.25x**[23](index=23&type=chunk) - The FAD calculation was updated to exclude Leasing Commissions for first-generation leases, which is expected to decrease Maintenance Capital by **$5-10 million** annually[24](index=24&type=chunk) [Salient Facts](index=11&type=section&id=Salient%20Facts) This section provides a concise overview of the company's property portfolio, market presence, and key capitalization metrics as of June 30, 2025 Company Overview as of June 30, 2025 | Metric | Value | | :--- | :--- | | **Properties** | | | Number of Properties | 619 | | Total Square Feet | 36.1M | | Markets | 60 in 32 states | | **Capitalization** | | | Enterprise Value | $10.5B | | Market Capitalization | $5.6B | | Credit Rating (S&P/Moody's) | BBB/Baa2 | | Run Rate Net Debt to Adj. EBITDA | 6.0x | [Corporate Information](index=13&type=section&id=Corporate%20Information) Healthcare Realty is a REIT specializing in medical outpatient buildings, with a portfolio of 619 properties and a recently streamlined Board of Directors - Healthcare Realty (NYSE: HR) is a REIT specializing in owning and operating medical outpatient buildings, primarily near leading hospital campuses. As of June 30, 2025, its portfolio included **619 properties** across **32 states**, totaling **36.1 million square feet**[34](index=34&type=chunk) - The Board of Directors is chaired by Thomas N. Bohjalian and includes President and CEO Peter A. Scott. The board was recently reduced from **12 to 7 members**[9](index=9&type=chunk)[36](index=36&type=chunk) [Financial Statements](index=15&type=section&id=Financial%20Statements) This section presents the company's balance sheet and income statement, highlighting changes in assets, liabilities, revenues, and net loss for Q2 2025 [Balance Sheet](index=15&type=section&id=Balance%20Sheet) As of June 30, 2025, total assets decreased to $10.24 billion due to dispositions, while total liabilities and equity also saw reductions Selected Balance Sheet Data (in thousands) | Account | 2Q 2025 | 2Q 2024 | | :--- | :--- | :--- | | Total real estate investments, net | $8,674,578 | $10,434,689 | | Assets held for sale, net | $358,207 | $34,530 | | **Total assets** | **$10,235,572** | **$11,803,627** | | Notes and bonds payable | $4,694,391 | $5,148,153 | | **Total liabilities** | **$5,354,146** | **$5,828,935** | | **Total equity** | **$4,877,094** | **$5,970,817** | [Statements of Income](index=16&type=section&id=Statements%20of%20Income) For Q2 2025, total revenues decreased to $297.5 million, resulting in a wider net loss of $(157.9) million, primarily due to asset sales and impairment charges Selected Income Statement Data (in thousands) | Account | 2Q 2025 | 2Q 2024 | | :--- | :--- | :--- | | Rental income | $287,070 | $308,135 | | **Total Revenues** | **$297,502** | **$316,322** | | Property operating expense | $109,924 | $117,719 | | Depreciation and amortization | $147,749 | $173,477 | | Impairment of real estate assets | $(142,348) | $(132,118) | | **Net loss attributable to common stockholders** | **$(157,851)** | **$(143,780)** | | **Diluted earnings per common share** | **$(0.45)** | **$(0.39)** | - General and administrative expenses included **$10.3 million** in normalizing items, primarily related to restructuring, severance costs, and advisory fees[42](index=42&type=chunk)[43](index=43&type=chunk) [REIT Performance Metrics](index=17&type=section&id=FFO%2C%20Normalized%20FFO%2C%20%26%20FAD) This section details key REIT-specific financial metrics, including FFO, Normalized FFO, and FAD, along with capital funding and commitment activities [FFO, Normalized FFO, & FAD](index=17&type=section&id=FFO%2C%20Normalized%20FFO%2C%20%26%20FAD) In Q2 2025, FFO was $0.34 per share and Normalized FFO was $0.41 per share, with FAD totaling $115.4 million after various adjustments Key Performance Metrics (in thousands, except per share data) | Metric | 2Q 2025 | 2Q 2024 | | :--- | :--- | :--- | | FFO | $120,371 | $123,797 | | FFO per common share - diluted | $0.34 | $0.33 | | Normalized FFO | $143,736 | $143,500 | | Normalized FFO per common share - diluted | $0.41 | $0.38 | | FAD | $115,354 | $107,643 | - Key adjustments to arrive at Normalized FFO included adding back **$10.3 million** in restructuring charges, **$10.6 million** for a merger-related fair value adjustment, and **$1.5 million** in credit losses[46](index=46&type=chunk) [Capital Funding & Commitments](index=19&type=section&id=Capital%20Funding%20%26%20Commitments) In Q2 2025, the company funded $42.0 million for re/development and $33.4 million for first-generation tenant improvements, with maintenance capital expenditures totaling $26.3 million Capital Expenditures (in thousands) | Category | 2Q 2025 | 2Q 2024 | | :--- | :--- | :--- | | Re/development | $42,040 | $44,796 | | 1st generation TI/LC & acquisition capex | $33,369 | $13,010 | | **Total Maintenance Capex** | **$26,335** | **$35,134** | - Leasing commitments for leases commencing in Q2 2025 covered **838,063 square feet** with a weighted average lease term (WALT) of **43.8 months**[50](index=50&type=chunk) [Debt & Liquidity](index=20&type=section&id=Debt%20Metrics) This section provides an overview of the company's debt structure, maturity profile, and compliance with financial covenants, alongside its current liquidity position [Debt Metrics](index=20&type=section&id=Debt%20Metrics) As of June 30, 2025, total debt principal was $4.90 billion with a weighted average interest rate of 3.61% and a well-staggered maturity schedule Debt Summary as of June 30, 2025 | Category | Value | | :--- | :--- | | Total Principal Balance | $4,903,872 thousand | | Weighted Average Maturity | 41 months | | Weighted Average Contractual Rate | 3.61% | | % Fixed Rate Debt (net of cash) | 93.7% | - The company has **$628.9 million** in debt maturing in 2026 and **$1.12 billion** maturing in 2027[56](index=56&type=chunk) [Debt Covenants & Liquidity](index=21&type=section&id=Debt%20Covenants%20%26%20Liquidity) The company maintained compliance with all debt covenants as of June 30, 2025, with a total debt to total capital ratio of 39.7% and approximately $1.2 billion in total liquidity Selected Debt Covenant Compliance | Covenant | Requirement | Actual (as of 6/30/25) | | :--- | :--- | :--- | | Leverage Ratio (Total Debt/Total Capital) | Not > 60% | 39.7% | | Fixed Charge Coverage Ratio (EBITDA/Fixed Charges) | Not < 1.50x | 3.0x | | Unencumbered Leverage Ratio | Not > 60% | 43.0% | - Run-rate Net Debt to Adjusted EBITDA was **6.0x**, proforma for July dispositions[58](index=58&type=chunk)[60](index=60&type=chunk) - Total liquidity sources include **$25.5 million** in cash and **$1.205 billion** in availability under the unsecured credit facility[59](index=59&type=chunk) [Portfolio Activity](index=23&type=section&id=JV%20and%20Disposition%20Activity) This section details the company's investment activities, including significant asset dispositions, joint venture interests, and ongoing re/development projects [Investment Activity (Dispositions)](index=23&type=section&id=Investment%20Activity) Through July 30, 2025, the company completed 13 disposition transactions totaling $210.5 million at a 6.2% cap rate, targeting non-core assets 2025 Disposition Activity Summary | Period | of Properties | Total Square Feet | Sale Price | Average Cap Rate | | :--- | :--- | :--- | :--- | :--- | | 1Q 2025 | 4 | 227,952 | $28,100k | N/A | | 2Q 2025 | 4 (+2 land) | 177,906 | $53,086k | N/A | | Post-Q2 | 5 | 504,231 | $129,350k | N/A | | **Total YTD** | **13** | **910,089** | **$210,536k** | **6.2%** | [Joint Ventures](index=25&type=section&id=Joint%20Ventures) The company holds interests in 65 properties through joint ventures, contributing $8.2 million in NOI at its share in Q2 2025, with major partnerships and a net debt share of $32.4 million Joint Venture Portfolio Summary (at HR's Share) | Metric | Total | | :--- | :--- | | of Properties | 65 | | Square Feet | 4,253,845 | | Occupancy | 88% | | Q2 2025 NOI at Share | $8,225 thousand | | Debt at Share | $42,211 thousand | | Net Debt at Share | $32,437 thousand | [Re/development Activity](index=27&type=section&id=Re%2Fdevelopment%20Activity) The company has an active re/development pipeline of nearly 1 million square feet with a total budget of $259.0 million, targeting stabilized yields between 7.0% and 12.0% Active Re/development Pipeline Summary | Category | Square Feet | Budget | Cost to Complete | Projected Stabilized Yield | | :--- | :--- | :--- | :--- | :--- | | Development | 325,356 | $158,800k | $15,642k | 7.0% - 8.5% | | Redevelopment | 647,570 | $100,200k | $25,289k | 9.0% - 12.0% | | **Total** | **972,926** | **$259,000k** | **$40,931k** | **N/A** | [Portfolio Overview](index=29&type=section&id=Portfolio) This section provides a comprehensive look at the company's diversified portfolio by market, property type, and strategic alignment with health systems [Portfolio by Market and Type](index=29&type=section&id=Portfolio) The company's portfolio of 619 properties, totaling 36.1 million square feet, is diversified across 60 markets, with Dallas as the largest contributor to NOI Top 5 Markets by % of NOI | Market | % of NOI | | :--- | :--- | | Dallas, TX | 9.0% | | Seattle, WA | 6.4% | | Charlotte, NC | 5.2% | | Houston, TX | 4.6% | | Denver, CO | 4.5% | Portfolio by Ownership and Tenant Type | Category | % of Square Feet | % of Cash NOI | | :--- | :--- | :--- | | Wholly Owned | 88.2% | 95.4% | | Joint Ventures | 11.8% | 4.6% | | Multi-Tenant | 85.1% | 80.4% | | Single-Tenant | 14.9% | 19.6% | [Health System Relationships and Proximity](index=30&type=section&id=Health%20Systems) The portfolio is strategically aligned with major health systems, with 93% of NOI from credit-rated systems and 73% of MOBs located on or adjacent to hospital campuses - The top five health system relationships (HCA, CommonSpirit, Baylor Scott & White, Ascension Health, Advocate Health) account for **30.6%** of the company's NOI[75](index=75&type=chunk) - Based on square footage, **94%** of the portfolio is associated with a credit-rated healthcare provider, and **42%** is leased by an investment-grade rated provider[77](index=77&type=chunk) MOB Proximity to Hospital | Location | % of Total Square Feet | | :--- | :--- | | On campus | 54.5% | | Adjacent to campus | 18.4% | | **Total On/Adjacent** | **72.9%** | | Off campus - affiliated | 20.0% | | Off campus | 7.1% | [Leasing](index=33&type=section&id=Lease%20Maturity%20%26%20Occupancy) This section details the company's lease maturity schedule, occupancy rates, and key leasing statistics, including spreads and tenant retention [Lease Maturity & Occupancy](index=33&type=section&id=Lease%20Maturity%20%26%20Occupancy) As of Q2 2025, the portfolio was 89.2% occupied with a weighted average lease term remaining of 52.8 months and a staggered maturity schedule Lease Maturity Schedule (% of Total SF) | Expiration Period | % of Total Square Feet | | :--- | :--- | | 3Q-4Q 2025 | 7.1% | | 2026 | 13.4% | | 2027 | 15.7% | | 2028 | 11.8% | | Thereafter | 52.0% | - Total portfolio occupancy was **89.2%** at the end of Q2 2025, with net absorption of **114,464 square feet** during the quarter[86](index=86&type=chunk)[87](index=87&type=chunk) [Leasing Statistics](index=34&type=section&id=Leasing%20Statistics) For Q2 2025, the company achieved 3.3% cash leasing spreads on same-store renewals and an 83.1% tenant retention rate, with an average in-place rent increase of 2.85% Q2 2025 Same Store Renewal Metrics | Metric | Value | | :--- | :--- | | Cash leasing spreads | 3.3% | | Tenant retention rate | 83.1% | - The average in-place contractual rent increase for the total portfolio is **2.85%**[91](index=91&type=chunk) - The portfolio's lease structure is primarily **Net (60.5%)** and **Modified Gross (27.9%)**[92](index=92&type=chunk) [Same Store Performance](index=35&type=section&id=Same%20Store) This section analyzes the operational and financial performance of the company's same-store portfolio, highlighting occupancy trends and cash NOI growth [Same Store Portfolio Metrics](index=35&type=section&id=Same%20Store) The same-store portfolio, representing 91% of total NOI, saw occupancy increase to 90.0% in Q2 2025, with positive net absorption Same Store Occupancy | Metric | 2Q 2025 | 2Q 2024 | Change | | :--- | :--- | :--- | :--- | | Period End Occupancy % | 90.0% | 89.0% | +100 bps | | Sequential Absorption (SF) | 103,000 | N/A | N/A | | Y-o-Y Absorption (SF) | 314,000 | N/A | N/A | - The same-store pool accounts for **$169.2 million**, or **91%**, of the company's total cash NOI of **$186.6 million** in Q2 2025[95](index=95&type=chunk) [Same Store Cash NOI](index=37&type=section&id=Same%20Store) Same-store cash NOI grew by 5.1% year-over-year in Q2 2025, driven by revenue increases and improved operating margins Same Store Year-Over-Year Change (Q2 2025 vs Q2 2024) | Metric | Y-o-Y Change | | :--- | :--- | | Revenues | +4.3% | | Expenses | +2.9% | | **Cash NOI** | **+5.1%** | | Average Occupancy | +80 bps | | Revenue per Occupied SF | +3.5% | - The same-store operating margin improved to **64.3%** in Q2 2025 from **63.8%** in Q2 2024[99](index=99&type=chunk) [Reconciliations](index=39&type=section&id=NOI%20Reconciliations) This section provides detailed reconciliations of GAAP Net Loss to key non-GAAP financial measures, including Cash NOI and Adjusted EBITDA [NOI Reconciliations](index=39&type=section&id=NOI%20Reconciliations) For Q2 2025, the net loss of $(160.1) million was reconciled to a total Cash NOI of $186.6 million, with further breakdown into portfolio segments Reconciliation of Net Loss to Cash NOI (Q2 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Net loss | ($160,144) | | Add: Other expense (income) | 175,898 | | Add: G&A expense | 23,482 | | Add: Depreciation and amortization | 147,749 | | Less: Straight-line rent revenue | (7,904) | | Other adjustments | (92,440) | | **Cash NOI** | **$186,641** | - Cash NOI is reconciled to Normalized FFO, showing that after deducting G&A, interest, and other items, the resulting Debt Covenant EBITDA for Q2 2025 was **$177.2 million**[107](index=107&type=chunk) [EBITDA Reconciliations](index=41&type=section&id=EBITDA%20Reconciliations) For Q2 2025, GAAP Net Loss of $(160.1) million was reconciled to an Adjusted EBITDA of $193.9 million, resulting in a Net Debt to Adjusted EBITDA ratio of 6.1x Reconciliation of Net Loss to Adjusted EBITDA (Q2 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Net loss | ($160,144) | | Add: Interest expense | 53,346 | | Add: Depreciation and amortization | 147,749 | | Add: Impairments on real estate assets | 140,877 | | Less: Gain on sales of assets | (20,004) | | Other adjustments | 32,096 | | **Adjusted EBITDA** | **$193,920** | - The Net Debt to Adjusted EBITDA ratio was **6.1x** for the quarter. The run-rate ratio, which includes the impact of July dispositions, was **6.0x**[110](index=110&type=chunk)[113](index=113&type=chunk) [Components of Net Asset Value](index=42&type=section&id=Components%20of%20Net%20Asset%20Value) This section outlines the key components contributing to the company's Net Asset Value as of June 30, 2025, including assets, liabilities, and shares outstanding NAV Components as of June 30, 2025 (in thousands) | Component | Value | | :--- | :--- | | **Assets** | | | Total Annualized Cash NOI | $718,340 | | Development & Redevelopment (Est. Total Cost) | $259,000 | | Land, Cash, & Other Assets | $1,101,710 | | **Liabilities & Equity** | | | Total Debt & Other Liabilities | $5,251,325 | | Total Shares Outstanding (incl. OP units) | 355,730,606 | [2025 Guidance](index=43&type=section&id=2025%20Guidance) This section presents the company's updated full-year 2025 guidance, reflecting revised expectations for same-store cash NOI growth, asset sales, FFO per share, and leverage Updated 2025 Full Year Guidance | Metric | Prior Guidance (Low-High) | Current Guidance (Low-High) | | :--- | :--- | :--- | | Same store cash NOI growth | 3.0% - 3.75% | 3.25% - 4.0% | | Asset sales and JV contributions | $400M - $500M | $800M - $1,000M | | Normalized FFO per share | $1.56 - $1.60 | $1.57 - $1.61 | | Net debt to adjusted EBITDA | 6.0x - 6.25x | 5.4x - 5.7x | - The company significantly increased its asset sales guidance for 2025, doubling the low end from **$400 million** to **$800 million** and the high end from **$500 million** to **$1 billion**[120](index=120&type=chunk) - Guidance for Normalized G&A was lowered from **$52-56 million** to **$48-52 million**, reflecting cost-saving initiatives[120](index=120&type=chunk)

Core Insights - Healthcare Realty Trust reported a GAAP net loss of $157.9 million, or $0.45 per share, for Q2 2025, compared to a loss of $143.8 million, or $0.39 per share, in Q2 2024 [3][5] - The company achieved NAREIT FFO of $120.4 million, or $0.34 per share, and Normalized FFO of $143.7 million, or $0.41 per share, showing slight improvements year-over-year [3][5] - The company executed 341 new and renewal leases totaling 1.5 million square feet during the quarter, with a 5.1% growth in cash NOI and a 90% occupancy rate [4][5] Financial Performance - The company’s total revenues for Q2 2025 were $297.5 million, slightly down from $298.9 million in Q1 2025 [29] - Property operating expenses were $109.9 million, while general and administrative expenses increased to $23.5 million [29] - The company reported a total asset value of $10.2 billion as of Q2 2025, down from $10.5 billion in Q1 2025 [26] Leasing Activity - The weighted average lease term for new leases was 5.3 years, with an average annual escalator of 3.2% [6] - Health system leasing constituted approximately 33% of the signed lease volume in the quarter [6] - Significant new leases included a 24,000 square foot lease with CLS Health in Houston and a 23,000 square foot lease with UC Irvine Health in California [6] Disposition and Debt Management - The company completed asset sales totaling $182.4 million through nine transactions in Q2 2025, contributing to a year-to-date total of $210.5 million at a blended cap rate of 6.2% [7][8] - The run-rate Net Debt to Adjusted EBITDA ratio improved to 6.0x, with expectations to decrease to between 5.4x and 5.7x by year-end [7][8] - A $1.5 billion revolving credit facility was extended to mature in July 2030, with additional extension options on outstanding term loans [8] Strategic Initiatives - The company announced a series of leadership changes, including the appointment of Peter Scott as President and CEO, and initiated a platform restructuring to enhance operational performance [10][12] - A Strategic Plan was published to outline actions aimed at maximizing shareholder value and improving operational performance [9] - The Board approved a common stock dividend of $0.24 per share, representing a 23% reduction from the previous level [13][14] Guidance - The company increased its Normalized FFO per share guidance to a range of $1.57 to $1.61 and adjusted Same Store Cash NOI growth guidance to 3.25% - 4.00% [15] - The updated guidance reflects the company's outlook on rental rates, occupancy levels, and operating expenses [15]

Group 1 - Healthcare Realty Trust Incorporated (NYSE: HR) focuses on outpatient medical facilities, positioning itself defensively in the market, which is advantageous during macroeconomic downturns and tightening discretionary demand [1] - The company's strategy is to leverage its essential services nature to better withstand economic challenges, indicating a robust operational framework [1] Group 2 - The analyst emphasizes a long-term perspective on value creation, highlighting the importance of macroeconomic trends and corporate earnings in investment decisions [1]

Core Viewpoint - Healthcare Realty Trust Incorporated has reduced its Board of Directors from 12 to 7 members to align with best practices in corporate governance within the REIT industry [1][3]. Board Changes - Five directors, Nancy Agee, Ajay Gupta, James Kilroy, Peter Lyle, and Christann Vasquez, voluntarily retired from the Board effective June 18, 2025 [2]. - The Board now consists of seven directors, including independent chairman Thomas Bohjalian, President and CEO Peter Scott, and independent directors David Henry, Jay Leupp, Constance Moore, Glenn Rufrano, and Donald Wood [3]. Management Statements - Thomas Bohjalian expressed gratitude towards the retiring directors for their service and contributions, emphasizing the importance of their insights [3]. - Peter Scott highlighted the commitment to enhancing relationships with stakeholders and fostering a winning mentality at Healthcare Realty, supported by a high-quality portfolio and strong industry fundamentals [3]. Company Overview - Healthcare Realty is a real estate investment trust (REIT) specializing in medical outpatient buildings, with a portfolio of over 640 properties totaling over 38 million square feet across 15 growth markets [4].

Core Insights - The Conservative Income Portfolio focuses on value stocks with high margins of safety and aims to reduce volatility through well-priced options [1][3] - The Enhanced Equity Income Solutions Portfolio is designed to generate yields of 7-9% while minimizing volatility [1][3] - Trapping Value, with over 40 years of combined experience, emphasizes capital preservation while generating options income [3] Investment Strategies - The Covered Calls Portfolio aims for lower volatility income investing with a focus on capital preservation [2][3] - The fixed income portfolio targets securities with high income potential and significant undervaluation compared to peers [2][3] Company Positioning - H&R REIT (TSX: HR.UN:CA) maintains a price target of $11.00, consistent with previous analyses [2]

Group 1 - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] - The service offers a Free Two-Week Trial for potential investors to explore exclusive income-focused portfolios [1] Group 2 - The article emphasizes the importance of defensive stocks for medium- to long-term investment horizons [2]

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Group 1: Company Ratings and Analyst Insights - OUTFRONT Media Inc. has a dividend yield of 8.00%. Morgan Stanley analyst Benjamin Swinburne maintained an Equal-Weight rating and reduced the price target from $18 to $17, with an accuracy rate of 77%. TD Cowen analyst Lance Vitanza initiated coverage with a Hold rating and a price target of $16, having an accuracy rate of 75%. Recent news indicated worse-than-expected first-quarter financial results [7] - Healthcare Realty Trust Incorporated has a dividend yield of 8.08%. Wedbush analyst Richard Anderson maintained a Neutral rating and cut the price target from $18 to $16, with an accuracy rate of 62%. Wells Fargo analyst James Feldman assumed coverage with an Underweight rating and raised the price target from $16 to $17, having an accuracy rate of 61%. Recent news showed downbeat quarterly sales results [7] - Park Hotels & Resorts Inc. has a dividend yield of 9.63%. Morgan Stanley analyst Stephen Grambling maintained an Equal-Weight rating and reduced the price target from $12 to $10, with an accuracy rate of 63%. Truist Securities analyst Patrick Scholes maintained a Buy rating and cut the price target from $18 to $16, having an accuracy rate of 65%. Recent news reported better-than-expected quarterly results [7]

1Q2025 Supplemental Information FURNISHED AS OF MAY 1, 2025 - 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," "budget" and ...

Financial Data and Key Metrics Changes - Normalized FFO per share for the quarter was $0.39, aligning with expectations and marking a solid start to the year [20] - Same store cash NOI growth was 2.3%, impacted by higher operating expenses and weather volatility, with expectations for acceleration in growth for the remainder of the year [20][21] - The company ended the quarter with a net debt to adjusted EBITDA ratio of 6.4 times, unchanged from the end of 2024, with expectations to decrease this to a range of 6 to 6.25 times throughout the year [22] Business Line Data and Key Metrics Changes - The same store occupancy rate was reported at 89.3%, with expectations for sequential growth throughout 2025 [11][19] - The company commenced nearly 1,500,000 square feet of new and renewal leases during the quarter, with a solid signed non-occupied pipeline of over 630,000 square feet [16] - Tenant retention improved by over 300 basis points to almost 85%, contributing to a slight uptick in occupancy [18] Market Data and Key Metrics Changes - Demand for outpatient medical space remains robust, with health systems experiencing improving revenue and margin trends, driving further growth and space needs [18] - The company’s on-campus portfolio received the highest average score in a recent industry research piece, indicating a resilient outpatient portfolio compared to peers [18] Company Strategy and Development Direction - The company aims to optimize its portfolio by exiting markets with limited scale and focusing on selling assets rather than contributing them to joint ventures [12][30] - Key strategic focuses include improving leasing, optimizing the portfolio, enhancing the balance sheet, increasing efficiency, and instilling financial discipline [14] - The company plans to maintain its dividend at $0.31 per share while discussing its future based on earnings clarity and efficiency gains [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong fundamentals of outpatient medical real estate, with muted new supply and steadily increasing demand [9] - The company anticipates sequential occupancy growth and a strong leasing pipeline, with expectations for NOI growth throughout the year [19] - Management is focused on creating a more stable platform and improved earnings growth profile, aiming for a better stock price [14] Other Important Information - The company sold four buildings for $28 million in the first quarter, which required significant capital for repositioning [21] - The company has $1.4 billion of capacity on its revolving line of credit and has accessed this liquidity to pay off maturing notes [23] Q&A Session Summary Question: Did the areas of focus listed by the new CEO indicate priority? - The new CEO indicated that while not in perfect order of priority, portfolio optimization and deleveraging are immediate focuses, while leasing will take longer to stabilize [27][28] Question: How does the company view the joint venture model? - The CEO expressed a preference for maintaining existing joint ventures but emphasized selling assets rather than contributing more to those ventures [29][30] Question: Is the current guidance for 2025 confirmed? - The CEO reaffirmed the guidance for 2025 after reviewing the forecast with the team, indicating a good start to the year [35] Question: How will dispositions impact earnings? - The CEO acknowledged that while there may be a negative impact from deleveraging, the company is focused on offsetting that through efficiencies and leasing upside [102][104] Question: What is the strategy for retained cash flow? - The CEO emphasized prioritizing redevelopment opportunities for retained cash flow, as they yield higher returns [116]

Financial Data and Key Metrics Changes - Normalized FFO per share for Q1 2025 was $0.39, aligning with expectations and marking a strong start to the year [22] - Same store cash NOI growth was 2.3%, impacted by higher operating expenses and weather volatility, with expectations for acceleration in growth for the remainder of the year [22][23] - Net debt to adjusted EBITDA remained unchanged at 6.4 times, with expectations to decrease to a range of 6 to 6.25 times as the year progresses [24] Business Line Data and Key Metrics Changes - Same store occupancy at the end of Q1 was 89.3%, with expectations for sequential growth throughout 2025 [11] - The company commenced nearly 1,500,000 square feet of new and renewal leases during the quarter, with a solid signed non-occupied pipeline of over 630,000 square feet [17][20] - Tenant retention improved by over 300 basis points to almost 85%, contributing to the slight uptick in occupancy [20] Market Data and Key Metrics Changes - The demand for outpatient medical space remains robust, with health systems experiencing improving revenue and margin trends, driving further growth and space needs [20] - The company’s on-campus portfolio received an A+ score in a recent industry research piece, indicating a resilient outpatient portfolio compared to peers [20] Company Strategy and Development Direction - The new CEO emphasized a focus on leasing, portfolio optimization, balance sheet improvement, organizational efficiency, and financial discipline as initial strategic priorities [11][14] - The company plans to exit markets with limited scale and focus on selling assets rather than contributing them to joint ventures [13][31] - The dividend will be an output of the strategic plan, with discussions ongoing at the Board level regarding its future [16][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong fundamentals of outpatient medical real estate, with muted new supply and steadily increasing demand [7] - The company anticipates occupancy growth throughout 2025, with a target of 75 to 125 basis points of absorption by year-end [21] - Management is cautious about potential federal healthcare budget cuts but noted that outpatient medical assets may benefit indirectly from such changes [45] Other Important Information - The company maintained its dividend at $0.31 per share for the quarter, with discussions ongoing regarding its future based on earnings clarity [16] - The company sold four buildings for $28 million in Q1, with plans for further dispositions as part of its strategy [23] Q&A Session Summary Question: Did the areas of focus listed by the new CEO represent a priority order? - The CEO indicated that while not in perfect order of priority, portfolio optimization and deleveraging are immediate focuses, while leasing improvements may take two to three years [30] Question: How does the company view the joint venture model? - The CEO expressed a preference for maintaining existing joint ventures but emphasized the need to sell assets rather than contribute more to these ventures [31] Question: Is the current guidance for 2025 confirmed? - The CEO reaffirmed the guidance after reviewing the 2025 forecast, indicating comfort with the numbers presented [35] Question: How will dispositions impact earnings and dividend coverage? - The CEO acknowledged that while there may be a negative impact from asset sales, efforts are being made to offset dilution through efficiencies and leasing upside [104][105] Question: What is the outlook for rent collection from tenants? - The CFO reported full rent collection from a key tenant for February, March, and April, indicating stability despite ongoing bankruptcy processes [62] Question: How does the company plan to utilize retained cash flow? - The CEO highlighted redevelopment opportunities as a priority for retained cash flow, aiming for higher returns on reinvested capital [115]