Northwest Healthcare Properties Real Estate Investment Trust Reports Second Quarter 2025 Results, Suspends Its Distribution Reinvestment Plan, and Appoints Zachary Vaughan to the Board of Trustees

Core Insights - Northwest Healthcare Properties Real Estate Investment Trust (REIT) reported Q2 2025 results, announcing a revenue of $99.0 million, a decrease of 16.9% from Q2 2024, and the suspension of its distribution reinvestment plan (DRIP) [1][4][21] - The REIT appointed Zachary Vaughan as a non-independent trustee to the Board of Trustees, emphasizing his strong real estate experience [1][23] Financial Performance - Revenue from investment properties was $99.0 million for Q2 2025, down from $119.1 million in Q2 2024, attributed to the sale of non-core assets [4][32] - Same Property Net Operating Income (SPNOI) increased by 2.8% to $73.2 million in Q2 2025 compared to Q2 2024, indicating steady growth across all regions [4][5] - Net income for Q2 2025 was $32.6 million, a significant recovery from a net loss of $127.2 million in Q2 2024, driven by lower interest expenses and positive fair value adjustments [4][32] Operational Highlights - The REIT completed 298,000 square feet of new, renewal, and early leasing in Q2 2025, achieving a renewal rate of 89% [6] - The REIT's portfolio occupancy rate stood at 97% as of June 30, 2025, with a weighted-average lease expiry of 13.5 years [12][13] Capital Management - The REIT executed a capital recycling strategy, generating over $282 million in non-core asset sales year-to-date, with $231 million in proceeds from recent transactions [3][11] - The REIT's leverage ratio improved to 48.5% at the end of Q2 2025, down from 50.0% at the end of 2024, due to proactive debt repayment [12][13] Rent Deferral and Tenant Update - Healthscope Pty Ltd (HSO), the REIT's second-largest tenant, requested temporary rent relief amid financial difficulties, with ongoing discussions for a rent deferral arrangement [7][8] - As of now, all rent owed to the REIT from HSO, excluding deferred amounts, has been paid, and HSO continues to meet lease obligations [10] Distribution Reinvestment Plan (DRIP) - The REIT suspended its DRIP due to its unit price trading at a discount to net asset value (NAV), with cash distributions to be made starting September 2025 [21][22] Board Appointment - Zachary Vaughan's appointment to the Board is expected to enhance the REIT's strategic direction, filling a vacancy left by the retirement of a previous trustee [23]