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].