Healthcare Realty Trust (HR) Misses Q1 EPS by 3c

Healthcare Realty Trust (NYSE: HR) reported Q1 EPS of $0.03, $0.03 worse than the analyst estimate of $0.06.

• Normalized FFO per share increased 4.4% over first quarter of 2019.
• For the trailing twelve months ended March 31, 2020, same store cash NOI grew 2.4%.
  • Revenues increased 2.7% and revenue per average occupied square foot increased 2.8%.
  • Average occupancy was stable at 89.2%.
• Predictive growth measures in the same store multi-tenant portfolio include:
  • Average in-place rent increases of 2.89%
  • Future annual contractual increases of 3.11% for leases commencing in the quarter
  • Weighted average cash leasing spreads of 4.4% on 289,000 square feet renewed:
    • 12% (<0% spread)
    • 6% (0-3%)
    • 51% (3-4%)
    • 31% (>4%)
  • Tenant retention of 84.0%
• Portfolio leasing activity in the first quarter totaled 459,000 square feet related to 141 leases:
  • 343,000 square feet of renewals
  • 116,000 square feet of new and expansion leases
• During the first quarter, the Company acquired seven medical office buildings for $102.0 million totaling 339,000 square feet. Each of these acquisitions expands an existing relationship or market presence and was acquired on or before March 13, 2020. Acquisitions included:
  • In Los Angeles, an 87,000 square foot building adjacent to AA- rated MemorialCare Health's Saddleback Medical Center for $42.0 million.
  • In Atlanta, a 65,000 square foot building adjacent to A rated Wellstar Health System's Kennestone Hospital for $12.0 million.
  • In Raleigh, a 16,000 square foot building adjacent to A2 rated WakeMed's North Hospital for $6.3 million.
  • In Colorado Springs, a 34,000 square foot off campus building near BBB+ rated CommonSpirit Health's St. Francis Medical Center for $8.2 million.
  • In Denver, three buildings totaling 137,000 square feet adjacent to AA rated UCHealth's Highlands Ranch Hospital for $33.5 million.
• In February, the first lease commenced at the Company's 151,000 square foot development on the campus of AA+ rated UW Medicine's Valley Medical Center in Seattle. The medical office building is currently 60% leased.
• On March 18, 2020, the Company issued $300 million of Senior Notes due March 2030 with a coupon rate of 2.40%.
• Net debt to adjusted EBITDA was 5.3 times at the end of the quarter.
• A dividend of $0.30 per share was declared for the first quarter. Dividends paid totaled $40.4 million, which equaled 74.2% of normalized FFO and 88.7% of FAD.

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

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