Healthcare Realty Reports Fourth Quarter 2025 Results

Core Insights - Healthcare Realty Trust Incorporated reported a transformational year in 2025, with significant same-store growth and successful asset dispositions totaling $1.2 billion at attractive pricing levels, driven by long-term trends in outpatient medical services demand [2] Financial Performance - For Q4 2025, GAAP net income was $0.04 per share, compared to a loss of $0.31 per share in Q4 2024. The company reported a net loss of $0.71 per share for the full year 2025, down from a loss of $1.81 per share in 2024 [5][6] - NAREIT FFO for Q4 2025 was $0.36 per share, while Normalized FFO was $0.40 per share. For the full year, NAREIT FFO was $1.38 per share, and Normalized FFO was $1.61 per share [6][24] - Same-store cash NOI growth was +5.5% in Q4 2025, driven by an occupancy rate of 82.7% and cash leasing spreads of +3.7% [6] Leasing Activity - In Q4 2025, the company executed 292 new and renewal leases totaling 1.5 million square feet, with a weighted average lease term of 6.2 years and average annual escalators of 3.0% [7] - Full year lease executions reached approximately 5.8 million square feet, including 1.6 million square feet of new leases [6] Capital Allocation - The company completed asset sales of $682 million in Q4 2025 and $1.2 billion for the full year, through 34 transactions at a blended cap rate of 6.7% [6][10] - Significant market exits included a 25-property portfolio sale for $348.9 million, reducing exposure to non-priority markets [10] Balance Sheet and Governance - Net Debt to Adjusted EBITDA improved to 5.4x at year-end 2025, down from 6.1x the previous year. The company repaid approximately $650 million of term loans and $250 million of senior notes [6][8] - The company appointed new leadership, including Peter Scott as President & CEO and Daniel Gabbay as CFO, enhancing its governance and strategic direction [6] Dividend and Guidance - The Board approved a common stock dividend of $0.24 per share, payable on March 11, 2026 [11] - For 2026, the company provided guidance with expected earnings per share ranging from -$0.05 to $0.05, NAREIT FFO per share between $1.44 and $1.50, and same-store cash NOI growth projected at 3.5% to 4.5% [12]