Chiron Real Estate (NYSE:GMRE) Q4 2025 Earnings call February 26, 2026 09:00 AM ET Company ParticipantsBob Kiernan - CFOJamie Barber - General CounselMark Decker - CEOConference Call ParticipantsAustin Wurschmidt - Managing Director and Senior Equity AnalystGaurav Mehta - Managing Director and Senior Equity AnalystJuan Sanabria - Managing Director and Senior Equity AnalystWes Golladay - Senior Equity AnalystOperatorGreetings, Welcome to the Chiron Real Estate's Q4 2025 Earnings Call. At this time, all parti ...

Chiron Real Estate (NYSE:GMRE) Q4 2025 Earnings call February 26, 2026 09:00 AM ET Speaker7Greetings, welcome to the Chiron Real Estate's fourth quarter 2025 earnings call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. It is now my pleasure to introduce your host, Jamie Barber. Thank you. You may begin.Speaker4Good morning, everyone, we ...

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]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported FFO as adjusted of $0.47 per share and AFFO of $0.40 per share, with total same-store cash NOI growth of 3.9% [15][16] - For the full year 2025, FFO as adjusted was $1.84 per share and AFFO was $1.69 per share, with total same-store cash NOI growth of 4% [16] - The company ended the year with a net debt to adjusted EBITDA ratio of 5.2x and $2.4 billion in liquidity [18] Business Line Data and Key Metrics Changes - Outpatient medical segment represented over 50% of portfolio income, achieving same-store growth of 3.9% and 91% total occupancy [4][16] - The lab segment ended the year with 1.5% same-store growth and total occupancy of 77%, impacted by the recent Gateway acquisition [17] - Senior housing segment reported 12.6% same-store growth, with 16.7% growth in Q4, driven by favorable supply and demand fundamentals [18] Market Data and Key Metrics Changes - The Bay Area led all life science markets in Q4 2025 in absorption and leasing activity, with significant tenant demand [8] - The outpatient sector is benefiting from a shift in care delivery to lower-cost outpatient settings, supported by policy changes from CMS [5] Company Strategy and Development Direction - The company is focused on strengthening its portfolio through strategic acquisitions, including the Gateway acquisition and the formation of a pure-play senior housing REIT, Janus Living [10][21] - The merger with Physicians Realty Trust has created a strong platform in the outpatient sector, allowing for profitable internalization of property management [4][5] - The company plans to recycle capital through $1 billion or more in asset sales and recapitalizations in 2026 [21] Management's Comments on Operating Environment and Future Outlook - Management noted an improvement in capital raising and M&A activity, indicating early signs of a recovery in the life science sector [6][20] - The company expects FFOs adjusted to range from $1.70 to $1.74 per share for 2026, with same-store NOI growth forecasted between -1% to +1% [19] - Management emphasized the importance of maintaining a strong balance sheet and disciplined capital allocation to pursue strategic investments [19] Other Important Information - The company has $360 million of additional relationship-driven acquisitions in its senior housing pipeline, expected to close in Q1 2026 [13] - The company filed a confidential S-11 with the SEC for the Janus Living IPO, with expectations to close the offering in the first half of 2026 [14] Q&A Session Summary Question: Can you discuss the Gateway acquisition and its complement to the existing portfolio? - Management expressed excitement about the Gateway acquisition, viewing it as an opportunity rather than a concern about vacancy, and highlighted the strategic fit within their existing footprint [25][26] Question: What is the expected cadence of lab occupancy throughout the year? - Management indicated that total occupancy should improve by year-end 2026, contingent on continued positive trends in capital markets [30] Question: Can you provide more details on the lab leasing activity? - Management noted that the pipeline is strong, with a shift towards new leasing, and emphasized the importance of the current market conditions [36] Question: How will the lab occupancy losses impact 2026 FFO? - Management clarified that the impact is a combination of various factors, including occupancy losses and higher refinancing costs, with expectations for gradual recovery [41][42] Question: What is the strategy regarding refinancing activity? - Management stated that they will be opportunistic in accessing the market for refinancing, focusing on maturities ahead of them [58]

Core Insights - Healthpeak Properties, Inc. announced transaction activity totaling approximately $925 million, highlighting progress in its capital allocation strategy [1][8] Acquisition Details - In December 2025 and January 2026, Healthpeak acquired a 1.4-million square-foot campus on Gateway Boulevard in South San Francisco for $600 million, which is currently about 60% occupied and has significant density potential [2][8] - This acquisition expands Healthpeak's footprint in South San Francisco to roughly 6.5 million square feet across 210 acres, reinforcing its leadership in the biotechnology submarket [2] Dispositions and Future Transactions - During Q4 2025, Healthpeak completed outpatient medical dispositions totaling about $325 million, covering approximately 834,000 square feet of fully stabilized assets [3][8] - The company is in various stages of negotiations for additional outpatient medical sales, recapitalizations, and loan repayments, which could yield proceeds of about $700 million or more [4] Strategic Focus - Healthpeak's strategy involves capitalizing on strong demand for outpatient medical real estate by selling fully stabilized assets at low-6% cap rates and reinvesting in strategic life science assets with low-6% going-in yields [4] - This approach allows the company to acquire irreplaceable assets at a significant discount to replacement cost while enhancing its submarket positioning [4]

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]

Financial Data and Key Metrics Changes - The company reported a decrease in occupancy to 94.5% as of June 30, 2025, down from the previous quarter, primarily due to lease expirations and bankruptcies affecting properties [9][10] - The dividend was reduced from $0.21 per share to $0.15 per share, reflecting a rightsizing of the dividend as coverage dropped from 110% to 79% on a Funds Available for Distribution (FAD) basis [14][15] Business Line Data and Key Metrics Changes - The company successfully re-tenanted the Beaumont, Texas facility with Christus Health, which is now fully operational and paying rent [7] - The company completed the acquisition of a five-property portfolio of outpatient medical real estate, bringing total acquisition volume for 2024 and 2025 to approximately $150 million at a blended cash yield of 8.5% [11][12] Market Data and Key Metrics Changes - The company noted a significant increase in portfolio volumes, which averaged $300 million per quarter from 2022 to 2024, spiking to $2.1 billion in 2025 [12] - The market for higher quality assets is trading in the low to mid-six cap rates, with opportunities for higher returns available [26][28] Company Strategy and Development Direction - The company aims to renew portions of its credit facility due in 2026 and diversify its lender relationships to improve access to debt capital [13] - The management is focused on capital recycling, identifying assets for potential sale to enhance cash flows and reduce leverage [15][54] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving total occupancy over 95% by the end of the year, with expectations for stabilized occupancy at the East Orange property to exceed 90% within 24 to 36 months [10] - The management team emphasized the importance of maintaining a strong balance sheet and the potential for growth through strategic acquisitions and asset management [16][36] Other Important Information - The company is committed to improving transparency and clarity in its disclosures to better communicate with investors [18] - The management is undergoing a strategic review of the portfolio to identify opportunities for improvement and growth [16] Q&A Session Summary Question: What are the immediate strategic priorities for the company? - The CEO highlighted the need to develop a cohesive strategy with the team and board, focusing on refinancing and capital recycling as immediate priorities [21][22] Question: What types of assets are being considered for capital recycling? - The CFO indicated that ideal candidates for sale would be low-yielding assets with long-term leases and high-grade tenants, while also considering assets that may not fit long-term strategies [23][24] Question: What is the target leverage for the company? - The CEO mentioned a target leverage of sub-40% or sub-six times debt, aiming for a balance sheet that allows for growth [36] Question: How is the occupancy expected to trend going forward? - The COO stated that occupancy should remain above 95%, with some episodic downturns expected but overall consistency anticipated [43] Question: What is the expected impact of the Beaumont facility on future earnings? - The CFO noted that the Beaumont asset would contribute modestly to earnings in the third quarter, following its full occupancy starting in mid-May [44] Question: What is the size of dispositions being considered? - The CEO indicated a goal of $50 million to $100 million in dispositions, depending on market conditions and pricing [54]

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]

Financial Data and Key Metrics Changes - The company reported FFO as adjusted of $0.46 per share and AFFO of $0.44 per share, with total portfolio same store growth of 3.5% [19] - CCRC business reported same store growth of 8.6%, driven by rate growth of 5% and higher entrance fee sales [19] - Outpatient medical segment achieved 85% tenant retention, with a positive rent mark to market of 6% and same store cash NOI growth of 3.9% [20] Business Line Data and Key Metrics Changes - Outpatient medical segment saw same store growth of 3.9%, with over 1,000,000 square feet of leases executed, including approximately 200,000 square feet of new leasing [20] - CCRC portfolio generated approximately $200,000,000 of annual NOI, which is 50% higher than in 2019 before the pandemic [14] - Lab R&D business is beginning to see positive indicators, with new supply quickly going to zero [11] Market Data and Key Metrics Changes - The company has significant concentration in markets like Dallas, Houston, Nashville, Atlanta, Phoenix, and Denver, which are expected to drive growth [10] - Recent broker reports indicated over 4,000,000 square feet of inventory being removed from the supply pipeline in the lab sector [12] - The occupancy in the outpatient medical portfolio remains strong at 91-92% [48] Company Strategy and Development Direction - The company is focusing on internalizing property management to enhance tenant relationships and operational efficiency [8] - A strategic plan is being implemented to enhance operating procedures and elevate service standards [18] - The company is optimistic about the regulatory environment, particularly the proposed rule from CMS that would allow more procedures to be performed in outpatient settings [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the execution from the team and the diversified portfolio, despite challenges in the lab sector [24] - The political and regulatory environment is improving, with favorable changes in drug pricing and tax treatment for research and manufacturing [7][10] - Management noted that the capital markets have shown signs of improvement, which could benefit tenants seeking to raise capital [40][56] Other Important Information - The company completed an enterprise-wide technology upgrade to improve data integration and productivity [5] - The internalization of property management is expected to generate profit and improve tenant satisfaction [9] - The company has nearly $2,300,000,000 of liquidity and ended the quarter with a net debt to adjusted EBITDA of 5.2 times [22] Q&A Session Summary Question: Can you break down the occupancy decline in the lab segment? - Management indicated that the occupancy decline was due to lease expirations, tenant migration, and some tenants unable to raise capital [28][29] Question: What are the thoughts on capital allocation and balance sheet usage? - Management emphasized maintaining a strong balance sheet and being opportunistic with asset sales and buybacks [32][34] Question: How much impact do you expect from unsuccessful capital raises on occupancy? - Management acknowledged some headwinds for occupancy but noted positive signs in the capital markets that could improve the situation [40][42] Question: Can you provide insights on the development pipeline and capitalized interest? - Management stated that capitalized interest will trend down as projects come online, with ongoing entitlement processes for large projects [76] Question: What are the expectations for the CCRC occupancy? - Management noted that the sequential dip in occupancy is typical seasonality, with strong performance in independent living [78][80] Question: How does the company view the regulatory changes and their impact? - Management expressed optimism about regulatory changes, particularly the shift towards outpatient settings, which aligns with the company's focus [10][106]

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]