Healthcare Realty Trust (HR) Tops Q4 EPS by 13c, Revenues Beat

Healthcare Realty Trust (NYSE: HR) reported Q4 EPS of $0.20, $0.13 better than the analyst estimate of $0.07. Revenue for the quarter came in at $121.52 million versus the consensus estimate of $120.68 million.

Salient quarterly highlights include:

• Normalized FFO per share increased 4.0% over fourth quarter of 2018.
• For the trailing twelve months ended December 31, 2019, same store cash NOI grew 2.9%.
  • Revenues increased 2.5% and revenue per average occupied square foot increased 2.6%.
  • Operating expenses increased 1.8%.
  • Average occupancy remained stable at 89.3%.
• Predictive growth measures in the same store multi-tenant portfolio include:
  • Average in-place rent increases of 2.90%, up from 2.81% eight quarters ago
  • Future annual contractual increases of 3.16% for leases commencing in the quarter
  • Weighted average cash leasing spreads of 4.2% on 353,000 square feet renewed:
    • 13% (<0% spread)
    • 7% (0-3%)
    • 40% (3-4%)
    • 40% (>4%)
  • Tenant retention of 86.6%
• Portfolio leasing activity in the fourth quarter totaled 527,000 square feet related to 135 leases:
  • 382,000 square feet of renewals
  • 145,000 square feet of new and expansion leases
• During the fourth quarter, the Company acquired six medical office buildings for $107.4 million totaling 317,000 square feet. Acquisitions included:
  • In Raleigh, a 58,000 square foot building adjacent to A2 rated WakeMed's North Hospital for $21.6 million.
  • In Dallas, a 48,000 square foot building adjacent to AA- rated Baylor Scott & White Health's Medical Center of Plano for $20.1 million.
  • In Seattle, a 36,000 square foot building anchored by A rated EvergreenHealth for $22.8 million.
  • In Seattle, a 44,000 square foot building anchored by AA+ rated UW Medicine and A rated Overlake Hospital for $24.3 million.
  • In Seattle, a 20,000 square foot building adjacent to BBB+ rated CommonSpirit Health's Highline Medical Center for $10.0 million.
  • In Memphis, a 111,000 square foot building anchored by BBB+ rated Baptist Memorial Health Care. The 85% pre-leased building is being redeveloped for a total budget of $27.8 million, including the acquisition of the building for $8.7 million, and is expected to generate a yield of 7.6% once stabilized.
• Subsequent to the end of the quarter, the Company acquired an 87,000 square foot medical office building adjacent to AA- rated MemorialCare Health's Saddleback Medical Center in Los Angeles for $42.0 million.
• Fourth quarter dispositions totaled $39.7 million including four medical office buildings, two inpatient rehab facilities, and one skilled nursing facility.
• During the fourth quarter, the Company sold 3.1 million shares through its at-the-market equity program, generating $103.2 million in net proceeds.
• Net debt to adjusted EBITDA decreased to 4.9 times at the end of the quarter.
• A dividend of $0.30 per share was declared for the fourth quarter.

For earnings history and earnings-related data on Healthcare Realty Trust (HR) click here.

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