Form 8-K HEALTHCARE REALTY TRUST For: Aug 05

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August 5, 2015 5:04 PM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8‑K

CURRENT REPORT
Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 5, 2015 (August 5, 2015)


HEALTHCARE REALTY TRUST INCORPORATED
(Exact Name of Registrant as Specified in Charter)

MARYLAND
 
001-11852
 
62-1507028
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(I.R.S. Employer
Identification No.)


3310 West End Avenue, Suite 700, Nashville, Tennessee 37203
(Address of principal executive offices) (Zip Code)

(615) 269-8175
(Registrant's telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.02    Results of Operations and Financial Condition
On August 5, 2015, Healthcare Realty Trust Incorporated (the “Company”) issued a press release announcing its earnings for the second quarter ended June 30, 2015. A copy of this press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference in its entirety.

Item 7.01        Regulation FD Disclosure
The Company is furnishing its Supplemental Information for the six months ended June 30, 2015, which is also contained on its website (www.healthcarerealty.com). See Exhibit 99.2 to this Current Report on Form 8-K.

Item 9.01        Financial Statements and Exhibits
99.1    Second quarter earnings press release, dated August 5, 2015.
99.2    Supplemental Information for the three months ended June 30, 2015.









































SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
HEALTHCARE REALTY TRUST INCORPORATED
 
By:
/s/ B. Douglas Whitman, II
 
 
B. Douglas Whitman, II
 
 
Executive Vice President - Corporate Finance
Date: August 5, 2015
 
 











Carla Baca
Director of Corporate Communications
P: 615.269.8175
News Release
HEALTHCARE REALTY TRUST REPORTS NORMALIZED FFO OF $0.39 PER SHARE FOR THE SECOND QUARTER

NASHVILLE, Tennessee, August 5, 2015 - Healthcare Realty Trust Incorporated (NYSE: HR) today announced results for the second quarter ended June 30, 2015. Normalized FFO for the three months ended June 30, 2015 totaled $0.39 per diluted common share. Over the same time period, year-over-year revenue grew by $5.0 million to $96.7 million. The Company reported net income attributable to common stockholders for the quarter of $17.9 million.

Salient highlights include:
•
Normalized FFO for the second quarter grew $4.8 million, or 13.9% year-over-year, to $39.0 million. Over the same time period, normalized FFO per share increased 8.3%.
•
Same store NOI grew 6.7% for the trailing twelve months ended June 30, 2015 over the same period a year ago.
•
The four predictive growth measures in the same store multi-tenant portfolio were:
◦
contractual increases for in-place leases ("annual bumps") averaged 3.1%
◦
cash leasing spreads for renewals averaged 5.0%
◦
tenant retention was 87.3%
◦
the average yield on renewed leases increased 100 basis points
•
Same store occupancy improved to 89.5% from 87.8% a year ago. Same store revenue per average occupied square foot increased 2.1% for the trailing twelve months.
•
In June 2015, the Company acquired a 93% leased, 35,600 square foot medical office property in Seattle for a total purchase price of $13.9 million.  The property is located on Catholic Health Initiatives' Highline Medical Center campus and is adjacent to a 60,200 square foot on-campus medical office building the Company purchased in December 2014.  This increases our Seattle market portfolio size to 557,000 square feet and a total investment of $206.1 million.
•
During the quarter, the Company commenced two new on-campus developments in Austin and Denver totaling 110,900 square feet with a combined investment of $31.7 million.
•
In June 2015, the Company sold two single-tenant net lease properties in Indiana totaling 176,000 square feet for $97.0 million. The properties include a 117,500 square foot orthopedic inpatient surgical hospital and an attached 58,500 square foot medical office building. In May 2015, the Company disposed of an off-campus 5,300 square foot building in Virginia for $1.0 million.
•
The Company completed the redemption of its 6.5% $300 million notes due 2017 with proceeds from the 3.875% $250 million notes due 2025 together with the proceeds from dispositions.
•
A dividend of $0.30 per common share was declared, which is equal to 76.9% of normalized FFO.



 
 
 
HEALTHCAREREALTY.COM  | PAGE 1 OF 5


Healthcare Realty Trust is a real estate investment trust that integrates owning, managing, financing and developing income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. The Company had investments of approximately $3.2 billion in 197 real estate properties and mortgages as of June 30, 2015. The Company's 196 owned real estate properties are located in 30 states and total approximately 14.1 million square feet. The Company provided leasing and property management services to approximately 9.5 million square feet nationwide.
__________________________________________________________________________________________________________

Additional information regarding the Company, including this quarter's operations, can be found at www.healthcarerealty.com. Please contact the Company at 615.269.8175 to request a printed copy of this information.

In addition to the historical information contained within, the matters discussed in this press release may contain forward-looking statements that involve risks and uncertainties. These risks are discussed in filings with the Securities and Exchange Commission by Healthcare Realty Trust, including its Annual Report on Form 10-K for the year ended December 31, 2014 under the heading "Risk Factors," and as updated in its Quarterly Reports on Form 10-Q filed thereafter. Forward-looking statements represent the Company's judgment as of the date of this release. The Company disclaims any obligation to update forward-looking statements.


 
HEALTHCAREREALTY.COM  | PAGE 2 OF 5


HEALTHCARE REALTY TRUST INCORPORATED
Condensed Consolidated Balance Sheets (1) 
(amounts in thousands, except per share data)
(Unaudited)
 
ASSETS
 
 
 
 
Real estate properties:
 
6/30/2015

 
12/31/2014

Land
 

$186,231

 

$183,060

Buildings, improvements and lease intangibles
 
3,033,213

 
3,048,251

Personal property
 
9,970

 
9,914

Construction in progress
 
8,284

 
—

Land held for development
 
16,952

 
17,054

Total real estate properties
 
3,254,650

 
3,258,279

Less accumulated depreciation and amortization
 
(730,125
)
 
(700,671
)
Total real estate properties, net
 
2,524,525

 
2,557,608

Cash and cash equivalents
 
8,431

 
3,519

Mortgage notes receivable
 
1,900

 
1,900

Assets held for sale and discontinued operations, net
 
14,192

 
9,146

Other assets, net
 
191,524

 
185,337

Total assets
 

$2,740,572

 

$2,757,510

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
Liabilities:
 
 
 
 
Notes and bonds payable
 

$1,388,797

 

$1,403,692

Accounts payable and accrued liabilities
 
57,143

 
70,240

Liabilities of discontinued operations
 
168

 
372

Other liabilities
 
66,035

 
62,152

Total liabilities
 
1,512,143

 
1,536,456

Commitments and contingencies
 
 
 
 
Stockholders' equity:
 
 
 
 
Preferred stock, $.01 par value; 50,000 shares authorized; none issued and outstanding
 
—

 
—

Common stock, $.01 par value; 150,000 shares authorized; 100,418 and 98,828 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively
 
1,004

 
988

Additional paid-in capital
 
2,432,979

 
2,389,830

Accumulated other comprehensive income
 
(1,653
)
 
(2,519
)
Cumulative net income attributable to common stockholders
 
863,547

 
840,249

Cumulative dividends
 
(2,067,448
)
 
(2,007,494
)
Total stockholders' equity
 
1,228,429

 
1,221,054

Total liabilities and stockholders' equity
 

$2,740,572

 

$2,757,510

 
(1)
The Condensed Consolidated Balance Sheets do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.


 
HEALTHCAREREALTY.COM  | PAGE 3 OF 5


HEALTHCARE REALTY TRUST INCORPORATED
Condensed Consolidated Statements of Operations (1) 
(amounts in thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
 
Six Months Ended June 30,
 
 
 
2015

 
2014

 
2015

 
2014

Revenues
 
 
 
 
 
 
 
 
Rental income
 

$95,450

 

$89,279

 

$190,484

 

$175,781

Mortgage interest
 
31

 
969

 
62

 
3,590

Other operating
 
1,227

 
1,423

 
2,618

 
2,871

 
 
96,708

 
91,671

 
193,164

 
182,242

Expenses
 
 
 
 
 
 
 
 
Property operating
 
33,927

 
33,635

 
68,189

 
66,466

General and administrative
 
6,713

 
5,661

 
13,451

 
11,633

Depreciation
 
26,552

 
24,491

 
52,940

 
48,158

Amortization
 
2,474

 
2,775

 
5,142

 
5,534

Bad debts, net of recoveries
 
27

 
73

 
(181
)
 
121

 
 
69,693

 
66,635

 
139,541

 
131,912

Other Income (Expense)
 
 
 
 
 
 
 
 
Gain on sales of properties
 
41,549

 
—

 
41,549

 
—

Interest expense
 
(17,213
)
 
(18,066
)
 
(35,536
)
 
(35,984
)
Loss on extinguishment of debt
 
(27,998
)
 
—

 
(27,998
)
 
—

Pension termination
 
(5,260
)
 
—

 
(5,260
)
 
—

Impairment of real estate assets
 
—

 
—

 
(3,328
)
 
—

Impairment of internally-developed software
 
(654
)
 
—

 
(654
)
 
—

Interest and other income, net
 
147

 
2,035

 
239

 
2,136

 
 
(9,429
)
 
(16,031
)
 
(30,988
)
 
(33,848
)
 
 
 
 
 
 
 
 
 
Income From Continuing Operations
 
17,586

 
9,005

 
22,635

 
16,482

 
 
 
 
 
 
 
 
 
Discontinued Operations
 
 
 
 
 
 
 
 
Income from discontinued operations
 
330

 
108

 
663

 
18

Impairments of real estate assets
 
—

 
(3,105
)
 
—

 
(6,529
)
Gain on sale of property
 
—

 
3

 
—

 
3

Income (Loss) From Discontinued Operations
 
330

 
(2,994
)
 
663

 
(6,508
)
 
 
 
 
 
 
 
 
 
Net Income
 
17,916

 
6,011

 
23,298

 
9,974

Less: Net income attributable to noncontrolling interests
 
—

 
(40
)
 
—

 
(151
)
Net Income Attributable To Common Stockholders
 

$17,916

 

$5,971

 

$23,298

 

$9,823

Basic Earnings (Loss) Per Common Share:
 
 
 
 
 
 
 
 
Income from continuing operations
 

$0.18

 

$0.09

 

$0.23

 

$0.17

Discontinued operations
 
0.00

 
(0.03
)
 
0.01

 
(0.07
)
Net income attributable to common stockholders
 

$0.18

 

$0.06

 

$0.24

 

$0.10

Diluted Earnings (Loss) Per Common Share:
 
 
 
 
 
 
 
 
Income from continuing operations
 

$0.18

 

$0.09

 

$0.23

 

$0.17

Discontinued operations
 
0.00

 
(0.03
)
 
0.00

 
(0.07
)
Net income attributable to common stockholders
 

$0.18

 

$0.06

 

$0.23

 

$0.10

Weighted Average Common Shares Outstanding—Basic
 
99,273

 
94,508

 
98,819

 
94,331

Weighted Average Common Shares Outstanding—Diluted
 
99,945

 
95,978

 
99,554

 
95,788

(1)
The Condensed Consolidated Statements of Operations do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

 
HEALTHCAREREALTY.COM  | PAGE 4 OF 5


HEALTHCARE REALTY TRUST INCORPORATED
Reconciliation of FFO and Normalized FFO (1) (2) 
(amounts in thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
Three Months Ended June 30,
 
 
 
2015

 
2014

Net Income Attributable to Common Stockholders
 

$17,916

 

$5,971

Gain on sales of properties
 
(41,549
)
 
(3
)
Impairments of real estate assets
 
—

 
3,105

Real estate depreciation and amortization
 
28,542

 
27,017

Total adjustments
 
(13,007
)
 
30,119

Funds From Operations Attributable to Common Stockholders
 

$4,909

 

$36,090

Acquisition costs
 
167

 
49

Loss on extinguishment of debt
 
27,998

 
—

Pension termination
 
5,260

 
—

Impairment of internally-developed software
 
654

 
—

Refund of prior year overpayment of certain operating expenses
 
—

 
(1,919
)
Normalized Funds From Operations Attributable to Common Stockholders
 

$38,988

 

$34,220

Funds from Operations per Common Share—Diluted
 

$0.05

 

$0.38

Normalized Funds From Operations Per Common Share—Diluted
 

$0.39

 

$0.36

FFO Weighted Average Common Shares Outstanding
 
99,945

 
95,978



(1)
Funds from operations (“FFO”) and FFO per share are operating performance measures adopted by the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”). NAREIT defines FFO as the most commonly accepted and reported measure of a REIT’s operating performance equal to “net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.”
(2)
FFO does not represent cash generated from operating activities determined in accordance with accounting principles generally accepted in the United States of America and is not necessarily indicative of cash available to fund cash needs. FFO should not be considered an alternative to net income attributable to common stockholders as an indicator of the Company’s operating performance or as an alternative to cash flow as a measure of liquidity.











 
HEALTHCAREREALTY.COM  | PAGE 5 OF 5















2Q | 2015

Supplemental Information

FURNISHED AS OF AUGUST 5, 2015 (UNAUDITED)






Table of Contents

 
 
 
 
3

  
Corporate Information
 
 
 
5

  
Historical Reconciliation of FFO
 
 
 
6

 
Statements of Income Information
 
 
 
7

 
Balance Sheet Information
 
 
 
8

  
Debt Metrics
 
 
 
9

  
Investment Activity
 
 
 
10

  
Portfolio by Market
 
 
 
11

 
Square Feet by Type, Provider and Building Size
 
 
 
12

  
Lease Maturity and Tenant Size
 
 
 
13

 
Occupancy Information
 
 
 
14

 
Same Store Properties
 
 
 
15

  
Reconciliation of NOI
 
 
 
16

 
Same Store Leasing Statistics
 
 
 
17

  
Components of Net Asset Value
 
 
 
18

 
Components of Expected 2015 FFO

Copies of this report may be obtained at www.healthcarerealty.com or by contacting Investor Relations at 615.269.8175 or [email protected].
Forward looking statements and risk factors:
This Supplemental Information report contains disclosures that are “forward-looking statements” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words and phrases such as “can,” “may,” “payable,” “indicative,” “annualized,” “expect,” “expected,” “future cash or NOI,” “deferred revenue,” “rent increases,” “range of expectations,” “components of expected 2015 FFO,” and other comparable terms in this report. These forward-looking statements are made as of the date of this report and are not guarantees of future performance. These statements are based on the current plans and expectations of Company management and are subject to a number of unknown risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from those described in this release or implied by such forward-looking statements. Such risks and uncertainties include, among other things, the following: changes in the economy; increases in interest rates; the availability and cost of capital at expected rates; changes to facility-related healthcare regulations; competition for quality assets; negative developments in the operating results or financial condition of the Company's tenants, including, but not limited to, their ability to pay rent and repay loans; the Company's ability to reposition or sell facilities with profitable results; the Company's ability to re-lease space at similar rates as vacancies occur; the Company's ability to renew expiring long-term single-tenant net leases; the Company's ability to timely reinvest proceeds from the sale of assets at similar yields; government regulations affecting tenants' Medicare and Medicaid reimbursement rates and operational requirements; unanticipated difficulties and/or expenditures relating to future acquisitions and developments; changes in rules or practices governing the Company's financial reporting; the Company may be required under purchase options to sell properties and may not be able to reinvest the proceeds from such sales at rates of return equal to the return received on the properties sold; uninsured or underinsured losses related to casualty or liability; the incurrence of impairment charges on its real estate properties or other assets; and other legal and operational matters. Other risks, uncertainties and factors that could cause actual results to differ materially from those projected are detailed under the heading “Risk Factors,” in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) for the year ended December 31, 2014 and other risks described from time to time thereafter in the Company's SEC filings. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 
 
 
 
 
 
HEALTHCARE REALTY I 2
 
2Q I 2015 SUPPLEMENTAL INFORMATION



Corporate Information
 
 
Healthcare Realty Trust is a real estate investment trust that integrates owning, managing, financing and developing income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. The Company had investments of approximately $3.2 billion in 197 real estate properties and mortgages as of June 30, 2015. The Company’s 196 owned real estate properties are located in 30 states and total approximately 14.1 million square feet. The Company provided leasing and property management services to approximately 9.5 million square feet nationwide.

Corporate Headquarters
Healthcare Realty Trust Incorporated
  
West End Avenue, Suite 700
  
Nashville, Tennessee 37203
  
Phone: 615.269.8175
  
Fax: 615.269.8461
  
 
Website: www.healthcarerealty.com
 

Executive Officers
David R. Emery
  
Chairman of the Board and Chief Executive Officer
John M. Bryant, Jr.
  
Executive Vice President and General Counsel
Scott W. Holmes
  
Executive Vice President and Chief Financial Officer
Todd J. Meredith
  
Executive Vice President - Investments
B. Douglas Whitman, II
  
Executive Vice President - Corporate Finance

Board of Directors
David R. Emery
  
Chairman of the Board and Chief Executive Officer, Healthcare Realty Trust Incorporated
Errol L. Biggs, Ph.D.
  
Director, Graduate Programs in Health Administration, University of Colorado
C. Raymond Fernandez, M.D.
  
Retired Chief Executive Officer, Piedmont Clinic
Edwin B. Morris III
  
Managing Director, Morris & Morse Company, Inc.
J. Knox Singleton
  
President and Chief Executive Officer, Inova Health System
Bruce D. Sullivan
  
Retired Audit Partner, Ernst & Young LLP
Roger O. West
  
Retired General Counsel, Healthcare Realty Trust Incorporated
Dan S. Wilford
  
Retired President and Chief Executive Officer, Memorial Hermann Healthcare System


 



            
 
 
 
 
 
 
HEALTHCARE REALTY I 3
 
2Q I 2015 SUPPLEMENTAL INFORMATION


Corporate Information
 
Professional Services
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  
BDO USA, LLP
  
414 Union Street, Suite 1800, Nashville, Tennessee 37219
  
TRANSFER AGENT
  
Wells Fargo N.A., Shareowner Services
  
1110 Centre Pointe Curve, Suite 101, Mendota Heights, Minnesota 55120-4100
 
Stock Exchange, Symbol and CUSIP Number
 
SECURITY DESCRIPTION
STOCK EXCHANGE
SYMBOL
CUSIP NUMBER
Common Stock
NYSE
HR
421946104
Senior Notes due 2021
OTC
HR
421946AG9
Senior Notes due 2023
OTC
HR
421946AH7
Senior Notes due 2025
OTC
HR
421946AJ3
Dividend Reinvestment Plan
Through the Company’s transfer agent, Wells Fargo, named stockholders of record can re-invest dividends in shares at a 5% discount and may also purchase up to $60,000 of HR common stock per calendar year without a service or sales charge. For information, write Wells Fargo Shareowner Services, P.O. Box 64856, St. Paul, Minnesota 55164-0856, or call 1.800.468.9716. Information may also be obtained at the transfer agent’s website, www.shareowneronline.com.

  
Direct Deposit of Dividends
Direct deposit of dividends is offered as a convenience to stockholders of record. For information, write Wells Fargo Shareowner Services, P.O. Box 64856, St. Paul, Minnesota 55164-0856, or call 1.800.468.9716. Information may also be obtained at the transfer agent’s website, www.shareowneronline.com.


  
Dividends Declared
On August 4, 2015, the Company declared a dividend of $0.30 per share, payable on August 28, 2015, to stockholders of record on August 17, 2015.


  
Analyst Coverage
Cowen and Company, LLC
 
KeyBanc Capital Markets Inc.
 
 
Goldman, Sachs & Co.
 
Mizuho Securities USA Inc.
 
 
Green Street Advisors, Inc.
 
RBC Capital Markets, LLC
 
 
J.J.B. Hilliard W.L. Lyons, LLC
 
Stifel, Nicolaus & Company, Inc.
 
 
J.P. Morgan Securities LLC
 
SunTrust Robinson Humphrey, Inc.
 
 
JMP Securities LLC
 
Wells Fargo Securities, LLC
 
 
 

 
 
 
 
 
 
HEALTHCARE REALTY I 4
 
2Q I 2015 SUPPLEMENTAL INFORMATION


Historical Reconciliation of FFO (1) (2) 
(amounts in thousands, except for share data)


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
 
2014
 
 
2013
 
 
 
Q2

 
Q1

 
Q4

 
Q3

 
Q2

 
Q1

 
Q4

 
Q3

Net Income Attributable to Common Stockholders
 

$17,916

 

$5,382

 

$18,073

 

$3,991

 

$5,971

 

$3,852

 

$12,384

 

$19,765

Gain on sales of properties
 
(41,549
)
 
—

 
(9,280
)
 
—

 
(3
)
 
—

 
(2,748
)
 
(20,187
)
Impairments of real estate assets
 
—

 
3,328

 
995

 
4,505

 
3,105

 
3,425

 
—

 
6,259

Real estate depreciation and amortization
 
28,542

 
28,532

 
27,897

 
27,697

 
27,017

 
26,248

 
25,776

 
24,214

Total adjustments
 
(13,007
)
 
31,860

 
19,612

 
32,202

 
30,119

 
29,673

 
23,028

 
10,286

Funds from Operations Attributable to Commons Stockholders


$4,909

 

$37,242

 

$37,685

 

$36,193

 

$36,090

 

$33,525

 

$35,412

 

$30,051

Acquisition costs
 
167

 
38

 
471

 
188

 
49

 
—

 
681

 
504

Loss on extinguishment of debt
 
27,998

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Pension termination
 
5,260

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Impairment of internally-developed software
 
654

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Severance expense
 
—

 
141

 
—

 
—

 
—

 
—

 
—

 
—

Security deposit recognized upon sale
 
—

 
—

 
(407
)
 
—

 
—

 
—

 
—

 
—

Reversal of restricted stock amortization upon director / officer resignation
 
—

 
—

 
(115
)
 
(445
)
 
—

 
—

 
—

 
—

Refund of prior year overpayment of certain operating expenses
 
—

 
—

 
—

 
—

 
(1,919
)
 
—

 
—

 
—

Gain on sale of cost method investment in real estate
 
—

 
—

 
—

 
—

 
—

 
—

 
(1,492
)
 
—

Normalized Funds from Operations Attributable to Common Stockholders
 

$38,988

 

$37,421

 

$37,634

 

$35,936

 

$34,220

 

$33,525

 

$34,601

 

$30,555

Funds from Operations per Common Share—Diluted
 

$0.05

 

$0.38

 

$0.38

 

$0.37

 

$0.38

 

$0.35

 

$0.37

 

$0.32

Normalized Funds from Operations Per Common Share—Diluted
 

$0.39

 

$0.38

 

$0.38

 

$0.37

 

$0.36

 

$0.35

 

$0.36

 

$0.32

FFO Weighted Average Common Shares Outstanding
 
99,945

 
99,137

 
98,086

 
97,329

 
95,978

 
95,585

 
95,485

 
94,836


(1)
Funds from operations (“FFO”) and FFO per share are operating performance measures adopted by the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”). NAREIT defines FFO as the most commonly accepted and reported measure of a REIT’s operating performance equal to “net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.”
(2)
FFO does not represent cash generated from operating activities determined in accordance with accounting principles generally accepted in the United States of America and is not necessarily indicative of cash available to fund cash needs. FFO should not be considered alternatives to net income attributable to common stockholders as indicators of the Company's operating performance or as alternatives to cash flow as measures of liquidity.





 
 
 
 
 
 
HEALTHCARE REALTY I 5
 
2Q I 2015 SUPPLEMENTAL INFORMATION


Statements of Income Information
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
2015
 
 
2014
 
 
2013
 
 
Q2

 
Q1

 
Q4

 
Q3

 
Q2

 
Q1

 
Q4

 
Q3

Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental income

$95,450

 

$95,034

 

$93,648

 

$92,095

 

$89,279

 

$86,502

 

$84,824

 

$77,301

Mortgage interest
31

 
31

 
32

 
44

 
969

 
2,621

 
2,411

 
3,926

Other operating
1,227

 
1,391

 
1,320

 
1,474

 
1,423

 
1,448

 
1,386

 
1,578

 
96,708

 
96,456

 
95,000

 
93,613

 
91,671

 
90,571

 
88,621

 
82,805

Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property operating
33,927

 
34,263

 
33,386

 
34,204

 
33,635

 
32,831

 
31,227

 
31,758

General and administrative
6,713

 
6,738

 
5,990

 
5,185

 
5,661

 
5,972

 
5,758

 
5,577

Depreciation
26,552

 
26,387

 
25,881

 
25,345

 
24,491

 
23,667

 
23,074

 
21,449

Amortization
2,474

 
2,667

 
2,630

 
2,656

 
2,775

 
2,759

 
2,826

 
2,595

Bad debts, net of recoveries
27

 
(207
)
 
(92
)
 
3

 
73

 
47

 
61

 
109

 
69,693

 
69,848

 
67,795

 
67,393

 
66,635

 
65,276

 
62,946

 
61,488

Other Income (Expense)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain on sales of properties
41,549

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Gain on sale of cost method investment in real estate
—

 
—

 
—

 
—

 
—

 
—

 
1,492

 
—

Interest expense
(17,213
)
 
(18,322
)
 
(18,237
)
 
(18,192
)
 
(18,066
)
 
(17,918
)
 
(17,772
)
 
(17,043
)
Loss on extinguishment of debt
(27,998
)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Pension termination
(5,260
)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Impairment of real estate assets
—

 
(3,328
)
 
—

 
—

 
—

 
—

 
—

 
—

Impairment of internally-developed software
(654
)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Interest and other income, net
147

 
91

 
91

 
409

 
2,035

 
100

 
261

 
237

 
(9,429
)
 
(21,559
)
 
(18,146
)
 
(17,783
)
 
(16,031
)
 
(17,818
)
 
(16,019
)
 
(16,806
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income From Continuing Operations
17,586

 
5,049

 
9,059

 
8,437

 
9,005

 
7,477

 
9,656

 
4,511

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discontinued Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from discontinued operations
330

 
333

 
729

 
221

 
108

 
(89
)
 
52

 
1,344

Impairments of real estate assets
—

 
—

 
(995
)
 
(4,505
)
 
(3,105
)
 
(3,425
)
 
—

 
(6,259
)
Gain on sales of properties
—

 
—

 
9,280

 
—

 
3

 
—

 
2,748

 
20,187

Income (Loss) From Discontinued Operations
330

 
333

 
9,014

 
(4,284
)
 
(2,994
)
 
(3,514
)
 
2,800

 
15,272

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income
17,916

 
5,382

 
18,073

 
4,153

 
6,011

 
3,963

 
12,456

 
19,783

Less: Net income attributable to noncontrolling interests
—

 
—

 
—

 
(162
)
 
(40
)
 
(111
)
 
(72
)
 
(18
)
Net Income Attributable To Common Stockholders

$17,916

 

$5,382

 

$18,073

 

$3,991

 

$5,971

 

$3,852

 

$12,384

 

$19,765


 
 
 
 
 
 
HEALTHCARE REALTY I 6

 
2Q I 2015 SUPPLEMENTAL INFORMATION


Balance Sheet Information
(dollars in thousands, except per share data)
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
 
2014
 
Real estate properties:
 
Q2

 
Q1

 
Q4

 
Q3

 
Q2

Land
 

$186,231

 

$187,951

 

$183,060

 

$183,991

 

$183,581

Buildings, improvements and lease intangibles
 
3,033,213

 
3,077,828

 
3,048,251

 
3,030,960

 
3,014,422

Personal property
 
9,970

 
10,014

 
9,914

 
9,535

 
9,504

Construction in progress
 
8,284

 
—

 
—

 
—

 
—

Land held for development
 
16,952

 
21,376

 
17,054

 
17,054

 
17,054

Total real estate properties
 
3,254,650

 
3,297,169

 
3,258,279

 
3,241,540

 
3,224,561

Less accumulated depreciation and amortization
 
(730,125
)
 
(723,393
)
 
(700,671
)
 
(693,517
)
 
(675,890
)
Total real estate properties, net
 
2,524,525

 
2,573,776

 
2,557,608

 
2,548,023

 
2,548,671

Cash and cash equivalents
 
8,431

 
10,417

 
3,519

 
1,684

 
17,523

Mortgage notes receivable
 
1,900

 
1,900

 
1,900

 
1,900

 
4,858

Assets held for sale and discontinued operations, net
 
14,192

 
14,164

 
9,146

 
11,479

 
5,759

Other assets, net
 
191,524

 
188,198

 
185,337

 
178,238

 
173,299

Total assets
 

$2,740,572

 

$2,788,455

 

$2,757,510

 

$2,741,324

 

$2,750,110

 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
Notes and bonds payable
 

$1,388,797

 

$1,444,555

 

$1,403,692

 

$1,403,379

 

$1,397,027

Accounts payable and accrued liabilities
 
57,143

 
50,144

 
70,240

 
60,017

 
72,460

Liabilities of discontinued operations
 
168

 
102

 
372

 
508

 
1,041

Other liabilities
 
66,035

 
64,469

 
62,152

 
57,913

 
60,232

Total liabilities
 
1,512,143

 
1,559,270

 
1,536,456

 
1,521,817

 
1,530,760

Commitments and contingencies
 
 
 
 
 
 
 
 
 
 
Stockholders' equity:
 
 
 
 
 
 
 
 
 
 
Preferred stock, $.01 par value; 50,000 shares authorized; none issued and outstanding
 
—

 
—

 
—

 
—

 
—

Common stock, $.01 par value; 150,000 shares authorized
 
1,004

 
1,001

 
988

 
981

 
972

Additional paid-in capital
 
2,432,979

 
2,423,121

 
2,389,830

 
2,374,345

 
2,348,925

Accumulated other comprehensive income (loss)
 
(1,653
)
 
(3,242
)
 
(2,519
)
 
51

 
51

Cumulative net income attributable to common stockholders
 
863,547

 
845,631

 
840,249

 
822,176

 
818,185

Cumulative dividends
 
(2,067,448
)
 
(2,037,326
)
 
(2,007,494
)
 
(1,978,046
)
 
(1,948,783
)
Total stockholders' equity
 
1,228,429

 
1,229,185

 
1,221,054

 
1,219,507

 
1,219,350

Total liabilities and stockholders' equity
 

$2,740,572

 

$2,788,455

 

$2,757,510

 

$2,741,324

 

$2,750,110

OTHER INFORMATION
 
 
 
 
 
 
 
 
 
 
Capital additions
 
 
 
 
 
 
 
 
 
 
   Revenue enhancing
 
$3,188
 
$781
 
$1,361
 
$187
 
$108
   Routine and non-revenue enhancing
 
3,580

 
1,469

 
2,635

 
2,501

 
4,451

2nd generation tenant improvements
 
2,496

 
2,992

 
5,956

 
4,085

 
3,132

1st generation tenant improvements
 
1,150

 
3,463

 
4,475

 
3,351

 
10,693



 
 
 
 
 
 
HEALTHCARE REALTY I 7

 
2Q I 2015 SUPPLEMENTAL INFORMATION


Debt Metrics
(dollars in thousands)

SUMMARY OF INDEBTEDNESS
 
 
Q2 2015 Interest Expense

 
Balance as of
6/30/2015

 
Weighted Months to
Maturity

 
Effective
Interest Rate

Senior Notes due 2017, net of discount
 

$2,422

 

$—

 
—

 
—

Senior Notes due 2021, net of discount
 
5,825

 
398,014

 
67

 
5.86
%
Senior Notes due 2023, net of discount
 
2,389

 
248,343

 
94

 
3.85
%
Senior Notes due 2025, net of discount (1)
 
1,837

 
249,796

 
118

 
3.97
%
Total Senior Notes Outstanding
 
12,473

 
896,153

 
88

 
4.77
%
Unsecured credit facility due 2017
 
644

 
158,000

 
22

 
1.58
%
Unsecured term loan facility due 2019
 
825

 
200,000

 
44

 
1.63
%
Mortgage notes payable, net
 
1,970

 
134,644

 
62

 
5.36
%
Total Outstanding Notes and Bonds Payable
 

$15,912

 

$1,388,797

 
72

 
4.01
%
Interest cost capitalization
 
(33
)
 
 
 
 
 
 
Deferred financing costs
 
803

 
 
 
 
 
 
Unsecured credit facility fee
 
531

 
 
 
 
 
 
Total Quarterly Consolidated Interest Expense
 

$17,213

 
 
 
 
 
 

(1) The effective interest rate includes the impact of the $1.7 million settlement of an forward-starting interest rate swap that is included in accumulated other comprehensive income on the Company's Condensed Consolidated Balance Sheets.

SELECTED FINANCIAL DEBT COVENANTS (2)
 
 
Calculation
 
Requirement
 
Trailing Twelve Months Ended 6/30/2015

Revolving Credit Facility and Term Loan
 
 
 
 
Leverage Ratio
 
Total Debt / Total Capital
 
Not greater than 60%
 
41.6
%
Secured Leverage Ratio
 
Total Secured Debt / Total Capital
 
Not greater than 30%
 
4.0
%
Unencumbered Leverage Ratio
 
Unsecured Debt / Unsecured Real Estate
 
Not greater than 60%
 
42.7
%
Fixed Charge Coverage Ratio
 
EBITDA / Fixed Charges
 
Not less than 1.65x
 
3.0x

Unsecured Coverage Ratio
 
Unsecured EBITDA / Unsecured Interest
 
Not less than 1.75x
 
3.2x

Tangible Net Worth
 
Tangible Net Worth - Required Base
 
Greater than $0
 
$837,796
Construction and Development
 
CIP / Total Assets
 
Not greater than 15%
 
0.3
%
Asset Investments
 
Mortgages & Unimproved Land / Total Assets
 
Not greater than 20%
 
0.7
%
 
 
 
 
 
 
 
Senior Notes
 
 
 

 


Incurrence of Total Debt
 
Total Debt / Total Assets
 
Not greater than 60%
 
40.1
%
Incurrence of Debt Secured by Any Lien
 
Secured Debt / Total Assets
 
Not greater than 40%
 
3.9
%
Maintenance of Total Unsecured Assets
 
Unencumbered Assets / Unsecured Debt
 
Not less than 150%
 
249.5
%
Debt Service Coverage
 
EBITDA / Interest Expense
 
Not less than 1.5x
 
3.2x

 
 
 
 
 
 
 
Other
 
 
 

 


Debt to EBITDA
 
Total Debt / EBITDA
 
Not required
 
6.2x

Debt to Enterprise Value (3)
 
Total Debt / Enterprise Value
 
Not required
 
36.6
%

(2) Does not include all financial and non-financial covenants and restrictions that are required by the Company's various debt agreements.
(3) Based on closing price of $24.04 on July 31, 2015 and 100,418,862 shares outstanding.

 
 
 
 
 
 
HEALTHCARE REALTY I 8
 
2Q I 2015 SUPPLEMENTAL INFORMATION


Investment Activity
(dollars in thousands)

 

2015 INVESTMENT ACTIVITY
 
 
 
 
 
 
 
 
 
 
 
Location
 
Property Type
 
Closing
 
Purchase Price of Acquisition

 

Square Feet

 
Aggregate
Leased %

Acquisitions
 
 
 
 
 
 
 
 
 
 
San Jose, CA
 
MOB
 
1/15/2015
 

$39,250

 
110,679

 
97
%
Seattle, WA
 
MOB
 
6/26/2015
 
13,900

 
35,558

 
93
%
Total
 
 
 
 
 

$53,150

 
146,237

 
96
%

HISTORICAL INVESTMENT ACTIVITY
 
 
 
 
Acquisitions (1)

 
Mortgage
Funding

 
Construction
Mortgage Funding

 
Re/Development
Funding

 
Total Investments

 
Dispositions

2011
 

$150,312

 

$40,000

 

$61,931

 

$79,375

 

$331,618

 

$22,700

2012
 
94,951

 
—

 
78,297

 
5,608

 
178,856

 
91,384

2013
 
216,956

 
—

 
58,731

 
—

 
275,687

 
101,910

2014
 
85,077

 
1,900

 
1,244

 
4,384

 
92,605

 
34,840

2015
 
53,150

 
—

 
—

 
10,746

 
63,896

 
98,185

Total
 

$600,446

 

$41,900

 

$200,203

 

$100,113

 

$942,662

 

$349,019

% of Total
 
63.7
%
 
4.4
%
 
21.3
%
 
10.6
%
 
100.0
%
 
 

RE/DEVELOPMENT ACTIVITY
 
 
 
 
Location
 
Type (2)
 
Square Feet

 
Budget

 
Amount Funded Q2 2015

 
Total Amount Funded Through 6/30/2015

 
Estimated Remaining Fundings

 
Aggregate
Leased %

 
Estimated Completion Date
Construction activity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Birmingham, AL (3)
 
Redev
 
138,000

 

$15,400

 

$1,607

 

$3,123

 

$12,277

 
100
%
 
Q4 2015
Nashville, TN (4)
 
Redev
 
294,000

 
51,800

 
2,558

 
12,007

 
39,793

 
83
%
 
Q1 2017
Total
 

 
432,000

 

$67,200

 

$4,165

 

$15,130

 

$52,070

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-construction activity (5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Denver, CO
 
Dev
 
98,000

 

$26,500

 

$15

 

$15

 

$26,485

 
 
 
 
Austin, TX
 
Dev
 
12,900

 
5,200

 
56

 
56

 
5,144

 
 
 
 
Total
 
110,900

 

$31,700

 

$71

 

$71

 

$31,629

 
 
 
 


(1)
Net of mortgage notes receivable payoffs upon acquisition.
(2)
Redev - Redevelopment; Dev - Development
(3)
Includes $5.9 million for the addition of a 400-space parking garage and $9.5 million in tenant improvement allowances and commissions.
(4)
Includes $15.2 million for the addition of 70,000 rentable square feet, $18.9 million for a 907-space parking garage and associated land, $17.7 million for existing building upgrades and tenant improvement allowances associated with newly executed leases. The size of the garage increased 267 parking spaces with a corresponding budget increase of $4.0 million. The increase in size of the garage is to allow for future development on adjacent land.
(5)
Includes projects that are in the design phase, but are expected to begin construction once permits and final contracts are executed.


 
 
 
 
 
 
HEALTHCARE REALTY I 9
 
2Q I 2015 SUPPLEMENTAL INFORMATION


Portfolio by Market and Building Size
(dollars in thousands) 

BY MARKET
 
 
 
 
SQUARE FEET
 
 
MOB/OUTPATIENT (89.3%)
 
INPATIENT (7.1%)
 
OTHER (3.6%)
 
 
 
 
 
Investment(1)

Multi-tenant

 
Single-tenant Net Lease

 
Rehab

 
Surgical

 
Other

 
Total

 
% of Total

Dallas - Fort Worth, TX

$471,112

2,149,939

 
 
 
42,627

 
156,245

 
 
 
2,348,811

 
16.6
%
Charlotte, NC
166,461

820,457

 
 
 
 
 
 
 
 
 
820,457

 
5.8
%
Nashville, TN
101,659

762,708

 
 
 
 
 
 
 
 
 
762,708

 
5.4
%
Houston, TX
128,264

591,027

 
 
 
 
 
 
 
 
 
591,027

 
4.2
%
Seattle - Bellevue, WA
206,120

489,499

 
67,510

 
 
 
 
 
 
 
557,009

 
3.9
%
Los Angeles, CA
136,119

488,371

 
 
 
63,000

 
 
 
 
 
551,371

 
3.9
%
Richmond, VA
145,486

548,801

 
 
 
 
 
 
 
 
 
548,801

 
3.9
%
Des Moines, IA
134,502

233,413

 
146,542

 
 
 
 
 
152,655

 
532,610

 
3.8
%
San Antonio, TX
101,729

483,811

 
 
 
39,786

 
 
 
 
 
523,597

 
3.7
%
Memphis, TN
90,522

515,876

 
 
 
 
 
 
 
 
 
515,876

 
3.6
%
Roanoke, VA
48,788

 
 
334,454

 
 
 
 
 
126,427

 
460,881

 
3.3
%
Austin, TX
124,690

351,725

 
 
 
66,095

 
 
 
 
 
417,820

 
3.0
%
Indianapolis, IN
76,709

382,695

 
 
 
 
 
 
 
 
 
382,695

 
2.7
%
Denver, CO
102,913

298,827

 
 
 
34,068

 
 
 
 
 
332,895

 
2.4
%
Honolulu, HI
133,731

298,427

 
 
 
 
 
 
 
 
 
298,427

 
2.1
%
Oklahoma City, OK
109,020

68,860

 
200,000

 
 
 
 
 
 
 
268,860

 
1.9
%
Chicago, IL
55,988

243,491

 
 
 
 
 
 
 
 
 
243,491

 
1.7
%
Miami, FL
51,433

241,980

 
 
 
 
 
 
 
 
 
241,980

 
1.7
%
Colorado Springs, CO
50,073

241,224

 
 
 
 
 
 
 
 
 
241,224

 
1.7
%
Phoenix, AZ
63,980

179,963

 
 
 
51,903

 
 
 
 
 
231,866

 
1.6
%
Detroit, MI
24,548

199,749

 
 
 
 
 
 
 
11,308

 
211,057

 
1.5
%
South Bend, IN
43,582

205,573

 
 
 
 
 
 
 
 
 
205,573

 
1.5
%
Springfield, MO
111,293

 
 
 
 
 
 
186,000

 
 
 
186,000

 
1.3
%
Washington, DC
31,083

182,836

 
 
 
 
 
 
 
 
 
182,836

 
1.3
%
Other (33 markets)
514,120

1,589,383

 
310,101

 
373,722

 
 
 
214,864

 
2,488,070

 
17.5
%
Total

$3,223,925

11,568,635

 
1,058,607

 
671,201

 
342,245

 
505,254

 
14,145,942

 
100.0
%
Number of Properties
 
159

 
15

 
11

 
2

 
9

 
196

 
 
Percent of Square Feet
 
81.8
%
 
7.5
%
 
4.7
%
 
2.4
%
 
3.6
%
 
100.0
%
 
 
Investment (1)
 

$2,504,334

 

$243,784

 

$191,815

 

$208,725

 

$75,268

 

$3,223,926

 
 
% of Investment
 
77.7
%
 
7.6
%
 
5.9
%
 
6.5
%
 
2.3
%
 
100.0
%
 
 

BY BUILDING SQUARE FEET
Size Range by Square Feet
 
% of Total

 
Total Square
Footage

 
Average
Square Feet

 
Number of
Properties

>100,000
 
44.9
%
 
6,355,031

 
144,433

 
44

<100,000 and >75,000
 
22.9
%
 
3,241,537

 
85,304

 
38

<75,000 and >50,000
 
17.0
%
 
2,401,689

 
63,202

 
38

<50,000
 
15.2
%
 
2,147,685

 
28,259

 
76

Total
 
100.0
%
 
14,145,942

 
72,173

 
196


(1)
Excludes gross assets held for sale, land held for development and corporate property.


 
 
 
 
 
 
HEALTHCARE REALTY I 10
 
2Q I 2015 SUPPLEMENTAL INFORMATION


Square Feet by Provider, Rank and Location (1) 

BY PROVIDER
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Top Providers
 
Health System Rank (2)
 
Credit Rating
 
Associated Buildings (3)

 
Associated SF (3)

 
% of Total SF(4)

 
Leased SF Total

 
% of Total SF

Baylor Scott & White Health
 
20
 
AA-/Aa3
 
26

 
2,366,944

 
16.7
%
 
1,133,059

 
8.0
%
Ascension Health
 
3
 
AA+/Aa2
 
16

 
1,167,438

 
8.3
%
 
270,953

 
1.9
%
Catholic Health Initiatives
 
7
 
A/A2
 
14

 
997,574

 
7.1
%
 
526,615

 
3.7
%
HCA
 
2
 
B+/B2
 
15

 
987,449

 
7.0
%
 
454,577

 
3.2
%
Carolinas HealthCare System
 
26
 
--/Aa3
 
16

 
765,116

 
5.4
%
 
580,533

 
4.1
%
Tenet Healthcare Corporation
 
11
 
B/B1
 
11

 
759,084

 
5.4
%
 
186,562

 
1.3
%
Bon Secours Health System
 
48
 
A-/A3
 
7

 
548,801

 
3.9
%
 
262,013

 
1.9
%
Baptist Memorial Health Care
 
93
 
 A-/--
 
7

 
515,876

 
3.6
%
 
107,594

 
0.8
%
HealthSouth
 
86
 
BB-/Ba3
 
6

 
412,989

 
2.9
%
 
346,894

 
2.5
%
Mercy (St. Louis)
 
28
 
AA-/Aa3
 
2

 
386,000

 
2.7
%
 
386,000

 
2.7
%
Indiana University Health
 
22
 
AA-/Aa3
 
3

 
382,695

 
2.7
%
 
243,072

 
1.7
%
University of Colorado Health
 
78
 
AA-/Aa3
 
5

 
345,240

 
2.4
%
 
131,562

 
0.9
%
Hawaii Pacific Health
 
161
 
A/A2
 
3

 
298,427

 
2.1
%
 
59,606

 
0.4
%
Trinity Health
 
13
 
AA-/Aa3
 
2

 
278,904

 
2.0
%
 
180,131

 
1.3
%
Community Health Systems
 
5
 
B+/B1
 
5

 
242,356

 
1.7
%
 
69,368

 
0.5
%
Medstar Health
 
32
 
A-/A2
 
3

 
241,739

 
1.7
%
 
126,449

 
0.9
%
Advocate Health Care
 
24
 
AA/Aa2
 
2

 
238,391

 
1.7
%
 
75,224

 
0.5
%
Memorial Hermann
 
44
 
A+/A1
 
4

 
206,090

 
1.5
%
 
82,686

 
0.6
%
Providence Health & Services
 
6
 
AA-/Aa3
 
3

 
202,729

 
1.4
%
 
131,614

 
0.9
%
Other Credit Rated
 
 
 
 
 
15

 
1,186,226

 
8.4
%
 
 
 
 
Total - Credit Rated
 
 
 
 
 
165

 
12,530,068

 
88.6
%
 
 
 
 
Total
 
 
 
 
 
196

 
14,145,942

 
100.0
%
 
 
 
 

BY RANK (% of total SF)
 
 
MSA
 
HEALTH SYSTEM (2)(3)
Rank
 
MOB / Outpatient

 
Total

 
MOB / Outpatient

 
Total

Top 25
 
55
%
 
53
%
 
59
%
 
55
%
Top 50
 
82
%
 
77
%
 
75
%
 
71
%
Top 75
 
86
%
 
81
%
 
77
%
 
72
%
Top 100
 
91
%
 
87
%
 
85
%
 
82
%

MEDICAL OFFICE BUILDINGS BY LOCATION
 
 
 
 
2015

 
 
 
 
 
 
 
2014

 
 
Q2

 
Q1

 
Q4

 
Q3

 
Q2

 
Q1

On campus / adjacent
 
80
%
 
80
%
 
81
%
 
79
%
 
79
%
 
80
%
Off campus(5)
 
20
%
 
20
%
 
19
%
 
21
%
 
21
%
 
20
%
 
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%

(1)
Excludes mortgage notes receivable and assets classified as held for sale.
(2)
Ranked by revenue based on Modern Healthcare's Healthcare Systems Financials Database. The database includes nearly 500 out of approximately 1,500 health systems in the United States.
(3)
Associated buildings and square footage refers to on-campus, adjacent or off-campus/affiliated properties associated with these healthcare providers.
(4)
Based on square footage, 88.6% of HR's portfolio is associated with a credit-rated healthcare provider and 69.8% is associated with an investment-grade rated healthcare provider.
(5)
Approximately 45% of the off-campus square footage is anchored by a hospital system.


 
 
 
 
 
 
HEALTHCARE REALTY I 11
 
2Q I 2015 SUPPLEMENTAL INFORMATION


Lease Maturity and Tenant Size (1) 
(dollars in thousands)



LEASE MATURITY SCHEDULE
 
 
 
 
 
 
 
 
 
 
MULTI-TENANT ("MT")
 
SINGLE-TENANT NET LEASE ("STNL")
 
TOTAL
 
 
Number of Leases

 
Square Feet

 
% of Total MT Square Feet

 
Number of Leases

 
Square Feet

 
% of Total STNL Square Feet

 
Number of Leases

 
Square Feet

 
% of Total MT & STNL Square Feet

2015
 
320

 
1,007,506

 
8.5
%
 
—

 
—

 
—
%
 
320

 
1,007,506

 
7.1
%
2016
 
342

 
1,112,721

 
9.4
%
 
2

 
69,749

 
2.8
%
 
344

 
1,182,470

 
8.3
%
2017
 
337

 
1,451,200

 
12.3
%
 
5

 
334,454

 
13.5
%
 
342

 
1,785,654

 
12.5
%
2018
 
266

 
1,377,454

 
11.7
%
 
—

 
—

 
—
%
 
266

 
1,377,454

 
9.6
%
2019
 
266

 
1,264,991

 
10.7
%
 
9

 
371,805

 
15.0
%
 
275

 
1,636,796

 
11.5
%
2020
 
137

 
906,216

 
7.7
%
 
1

 
83,318

 
3.4
%
 
138

 
989,534

 
6.9
%
2021
 
80

 
431,507

 
3.7
%
 
2

 
143,868

 
5.8
%
 
82

 
575,375

 
4.0
%
2022
 
80

 
588,656

 
5.0
%
 
2

 
137,016

 
5.5
%
 
82

 
725,672

 
5.1
%
2023
 
92

 
665,198

 
5.6
%
 
1

 
75,000

 
3.0
%
 
93

 
740,198

 
5.2
%
2024
 
52

 
394,972

 
3.3
%
 
2

 
65,381

 
2.6
%
 
54

 
460,353

 
3.2
%
Thereafter
 
36

 
420,943

 
3.6
%
 
11

 
1,017,634

 
41.1
%
 
47

 
1,438,577

 
10.1
%



AVERAGE TENANT SIZE
 
 
NUMBER OF LEASES
Square Footage
 
Multi-Tenant Properties (2)

 
Single-Tenant
Net Lease Properties

0 - 2,500
 
961

 
—

2,501 - 5,000
 
560

 
—

5,001 - 7,500
 
178

 
1

7,501 - 10,000
 
104

 
1

10,001 +
 
205

 
33

Total Leases
 
2,008

 
35


(1)
Excludes mortgage notes receivable, land held for development, construction in progress, corporate property and assets classified as held for sale.
(2)
The average lease size in the multi-tenant properties is 4,792 square feet.


 
 
 
 
 
 
HEALTHCARE REALTY I 12
 
2Q I 2015 SUPPLEMENTAL INFORMATION


Occupancy Information (1) 
(dollars in thousands) 


OCCUPANCY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
 
 
 
2014

 
Investment at  6/30/2015

Square Feet at 6/30/2015

 
Q2

 
Q1

 
Q4

 
Q3

 
Q2

Multi-Tenant
 
 
 
 
 
 
 
 
 
 
 
 
Same store properties, as reported (2)

$2,006,981

9,432,232

 
87.4
%
 
86.8
%
 
87.1
%
 
87.0
%
 
85.9
%
Acquisitions
350,391

1,245,696

 
90.7
%
 
90.5
%
 
90.3
%
 
88.7
%
 
93.0
%
Reposition
197,461

1,169,789

 
50.7
%
 
50.7
%
 
53.6
%
 
53.2
%
 
52.6
%
Total

$2,554,833

11,847,717

 
84.2
%
 
83.8
%
 
83.7
%
 
83.9
%
 
83.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Single-Tenant Net lease
 
 
 
 
 
 
 
 
 
 
 
 
Same store properties, as reported (2)

$455,212

1,878,157

 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
Acquisitions
213,881

420,068

 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
Total

$669,093

2,298,225

 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Same store properties, as reported (2)

$2,462,193

11,310,389

 
89.5
%
 
89.1
%
 
89.3
%
 
89.2
%
 
88.3
%
Acquisitions
564,272

1,665,764

 
93.0
%
 
93.1
%
 
93.1
%
 
92.1
%
 
95.5
%
Reposition
197,461

1,169,789

 
50.7
%
 
50.7
%
 
53.6
%
 
53.2
%
 
52.6
%
Total

$3,223,926

14,145,942

 
86.7
%
 
86.6
%
 
86.4
%
 
86.6
%
 
86.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
# of Properties
 
 
 
 
 
 
 
 
 
 
 
 
Same store properties, as reported (2)
 
 
 
159

 
162

 
160

 
167

 
168

Acquisitions
 
 
 
18

 
18

 
18

 
14

 
13

Reposition
 
 
 
19

 
18

 
20

 
19

 
19

Total
 
 
 
196

 
198

 
198

 
200

 
200


(1)
Excludes mortgage notes receivable, land held for development, construction in progress, corporate property and assets classified as held for sale.
(2)
Properties previously disclosed as development conversions are now included in the same store properties. As reported except for the inclusion of development conversion properties.


 
 
 
 
 
 
HEALTHCARE REALTY I 13
 
2Q I 2015 SUPPLEMENTAL INFORMATION


Same Store Properties
(dollars in thousands) 
QUARTERLY(1)(2)
 
 
 
 
 
 
 
 
 
 
 
 
Q2 2015

 
Q1 2015

 
Q4 2014

 
Q3 2014

 
Q2 2014

 
Q1 2014

 
Q4 2013

 
Q3 2013

Multi-tenant
 
 
 
 
 
 
 
 
 


 


 


 
 
Revenues
 
$63,150
 
$62,542
 
$62,005
 
$61,547
 
$61,114
 
$60,255
 
$59,623
 
$57,958
Expenses
 
27,136
 
27,397
 
27,039
 
28,099
 
27,716
 
27,342
 
26,414
 
27,682
NOI
 
$36,014
 
$35,145
 
$34,966
 
$33,448
 
$33,398
 
$32,913
 
$33,209
 
$30,276
Occupancy
 
87.4
%
 
87.0
%
 
87.1
%
 
87.0
%
 
85.8
%
 
85.4
%
 
85.3
%
 
84.7
%
Number of properties
 
127
 
127
 
127
 
127
 
127
 
127
 
127
 
127
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Single-tenant net lease
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
$12,035
 
$12,083
 
$11,885
 
$11,625
 
$11,601
 
$11,553
 
$11,509
 
$11,488
Expenses
 
444
 
414
 
449
 
373
 
531
 
519
 
535
 
530
NOI
 
$11,591
 
$11,669
 
$11,436
 
$11,252
 
$11,070
 
$11,034
 
$10,974
 
$10,958
Occupancy
 
100.0
%
 
100.0
%
 
98.1
%
 
98.1
%
 
98.1
%
 
98.1
%
 
98.1
%
 
98.1
%
Number of properties
 
32
 
32
 
32
 
32
 
32
 
32
 
32
 
32
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
$75,185
 
$74,625
 
$73,890
 
$73,172
 
$72,715
 
$71,808
 
$71,132
 
$69,446
Expenses
 
27,580
 
27,811
 
27,488
 
28,472
 
28,247
 
27,861
 
26,949
 
28,212
Same Store NOI
 
$47,605
 
$46,814
 
$46,402
 
$44,700
 
$44,468
 
$43,947
 
$44,183
 
$41,234
Occupancy
 
89.5
%
 
89.2
%
 
88.9
%
 
88.8
%
 
87.8
%
 
87.5
%
 
87.4
%
 
87.0
%
Number of properties
 
159

 
159

 
159

 
159

 
159

 
159

 
159

 
159

% NOI year-over-year growth
 
7.1
%
 
6.5
%
 
5.0
%
 
8.4
%
 
 
 
 
 
 
 
 
TRAILING TWELVE MONTHS (1) (2)
 
 
Twelve Months Ended June 30,
 
 
 
2015

 
2014

 
% Change

Multi-tenant
 
 
 
 
 
 
Revenues
 
$249,244
 
$238,950
 
4.3
%
Expenses
 
$109,671
 
$109,154
 
0.5
 %
NOI
 
$139,573
 
$129,796
 
7.5
 %
Revenue per occupied square feet
 
$30.42
 
$29.83
 
2.0
%
Average occupancy
 
86.9
%
 
84.9
%
 
 
Number of properties
 
127
 
127
 
 
 
 
 
 
 
 
 
Single-tenant net lease
 
 
 
 
 
 
Revenues
 
$47,628
 
$46,151
 
3.2
%
Expenses
 
$1,680
 
$2,115
 
(20.6
)%
NOI
 
$45,948
 
$44,036
 
4.3
 %
Revenue per occupied square feet
 
$25.66
 
$25.06
 
2.4
%
Average occupancy
 
98.8
%
 
98.1
%
 
 
Number of properties
 
32
 
32
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
Revenues
 
$296,872
 
$285,101
 
4.1
%
Expenses
 
$111,351
 
$111,269
 
0.1
 %
Same Store NOI
 
$185,521
 
$173,832
 
6.7
 %
Revenue per occupied square feet
 
$29.54
 
$28.94
 
2.1
%
Average occupancy
 
88.9
%
 
87.1
%
 
 
Number of Properties
 
159
 
159
 
 
(1)
Excludes recently acquired or disposed properties, mortgage notes receivable, construction in progress, land held for development, corporate property, reposition properties and assets classified as held for sale.
(2)
Properties previously disclosed as development conversion are now included in the same store properties.

 
 
 
 
 
 
HEALTHCARE REALTY I 14
 
2Q I 2015 SUPPLEMENTAL INFORMATION


Reconciliation of NOI
(dollars in thousands) 

QUARTERLY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q2 2015

 
Q1 2015

 
Q4 2014

 
Q3 2014

 
Q2 2014

 
Q1 2014

 
Q4 2013

 
Q3 2013

Rental income (a)
 

$95,450

 

$95,034

 

$93,648

 

$92,095

 

$89,279

 

$86,502

 

$84,824

 

$77,301

Property lease guaranty revenue (b)
 
937

 
1,102

 
1,029

 
1,100

 
1,160

 
1,141

 
1,124

 
1,383

Exclude straight-line rent revenue
 
(2,475
)
 
(2,832
)
 
(3,122
)
 
(3,046
)
 
(2,504
)
 
(2,297
)
 
(2,939
)
 
(2,371
)
Revenue
 
93,912

 
93,304

 
91,555

 
90,149

 
87,935

 
85,346

 
83,009

 
76,313

Property operating expense
 
(33,927
)
 
(34,263
)
 
(33,386
)
 
(34,204
)
 
(33,635
)
 
(32,831
)
 
(31,227
)
 
(31,758
)
NOI
 

$59,985

 

$59,041

 

$58,169

 

$55,945

 

$54,300

 

$52,515

 

$51,782

 

$44,555

Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisitions
 
(9,805
)
 
(9,613
)
 
(8,728
)
 
(8,207
)
 
(6,442
)
 
(5,143
)
 
(4,347
)
 
(478
)
Reposition
 
(1,290
)
 
(1,313
)
 
(1,715
)
 
(1,528
)
 
(1,880
)
 
(1,898
)
 
(1,693
)
 
(1,163
)
Dispositions / other
 
(1,285
)
 
(1,301
)
 
(1,324
)
 
(1,510
)
 
(1,510
)
 
(1,527
)
 
(1,559
)
 
(1,680
)
Same store NOI
 

$47,605

 

$46,814

 

$46,402

 

$44,700

 

$44,468

 

$43,947

 

$44,183

 

$41,234

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a) Rental income reconciliation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property operating
 

$75,470

 

$74,654

 

$73,153

 

$71,847

 

$71,029

 

$69,274

 

$67,015

 

$62,241

Single-tenant net lease
 
17,505

 
17,548

 
17,373

 
17,202

 
15,746

 
14,931

 
14,870

 
12,689

Straight-line rent
 
2,475

 
2,832

 
3,122

 
3,046

 
2,504

 
2,297

 
2,939

 
2,371

Total consolidated rental income
 

$95,450

 

$95,034

 

$93,648

 

$92,095

 

$89,279

 

$86,502

 

$84,824

 

$77,301

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(b) Other operating income reconciliation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property lease guaranty revenue
 

$937

 

$1,102

 

$1,029

 

$1,100

 

$1,160

 

$1,141

 

$1,124

 

$1,383

Interest income
 
156

 
157

 
163

 
246

 
130

 
192

 
173

 
102

Other
 
134

 
132

 
128

 
128

 
133

 
115

 
89

 
93

Total consolidated other operating income
 

$1,227

 

$1,391

 

$1,320

 

$1,474

 

$1,423

 

$1,448

 

$1,386

 

$1,578


TRAILING TWELVE MONTHS
 
 
Twelve Months Ended June 30,
 
 
 
2015

 
2014

NOI
 
$233,140
 
$203,152
Less:
 
 
 
 
Acquisitions
 
(36,353
)
 
(16,410
)
Reposition
 
(5,846
)
 
(6,634
)
Dispositions / other
 
(5,420
)
 
(6,276
)
Same store NOI
 

$185,521

 

$173,832



 
 
 
 
 
 
HEALTHCARE REALTY I 15
 
2Q I 2015 SUPPLEMENTAL INFORMATION



Same Store Leasing Statistics (1) 


 
 
 
 
 
 
 
 
 
 
 
 

 
2015
2014 (2)
2013
 
 
Q2

Q1

 
Q4

Q3

Q2

Q1

 
Q4

Q3

Q2

Contractual increases for in-place leases ("annual bumps")
 

 
 
 
 
 
 
 
 
 
Multi-tenant properties
3.1
%
3.0
%
 
2.9
%
3.0
%
3.0
%
2.9
%
 
3.1
%
3.0
%
3.2
%
Single-tenant net lease properties
2.2
%
0.7
%
 
6.9
%
3.5
%
2.1
%
1.7
%
 
3.0
%
2.2
%
2.1
%
Cash leasing spreads for renewals, multi-tenant properties
5.0
%
3.6
%
 
4.0
%
1.4
%
2.5
%
2.0
%
 
1.6
%
2.7
%
1.0
%
Tenant retention rate, multi-tenant properties
87.3
%
83.1
%
 
88.6
%
85.9
%
89.7
%
77.4
%
 
78.4
%
85.2
%
77.5
%


 
 
 
 
As of 6/30/2015

 
Multi-Tenant Contractual Rental Rate Increases by Type
 
 
Annual increase
84.9
%
 
Non-annual increase
7.6
%
 
No increase (term < 1 year)
3.9
%
 
No increase (term > 1 year)
3.6
%
 
 
 
 
Tenant Type
 
 
Multi-Tenant properties
 
 
Hospital
45.6
%
 
Physician and other
54.4
%
 
Single-Tenant net lease properties
 
 
Hospital
79.9
%
 
Other
20.1
%
 
 
 
 
Lease Structure, multi-tenant only
 
Gross
17.6
%
 
Modified gross
34.1
%
 
Net
48.3
%
 
 
 
 
Ownership Type
 
Ground lease
58.8
%
 
Fee simple
41.2
%
 


(1)
Excludes mortgage notes receivable, construction in progress, land held for development, corporate property, reposition properties and assets classified as held for sale.
(2)
Reflects amounts reported in prior periods.


 
 
 
 
 
 
HEALTHCARE REALTY I 16
 
2Q I 2015 SUPPLEMENTAL INFORMATION


Components of Net Asset Value
(dollars in thousands) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset Type
 
Q2 2015 Same Store NOI(1)
 
Q2 2015 Acquisitions NOI
 
Q2 2015 Reposition NOI(2)

 
 Timing Adjustments(3)

 
Q2 2015 Adjusted NOI

 
 Annualized Adjusted NOI
 
% of
Adjusted NOI

MOB / Outpatient
 
$40,026
 
$6,345
 
$1,393
 
$2,681
 
$50,445
 
$201,780
 
82.0
%
Inpatient rehab
 
4,525
 
274
 
—

 
—

 
4,799

 
19,196
 
7.8
%
Inpatient surgical
 
2,076
 
2,320
 
—

 
—

 
4,396

 
17,584
 
7.1
%
Other
 
978
 
866
 
73
 
—

 
1,917

 
7,668
 
3.1
%
Total NOI
 
$47,605
 
$9,805
 
$1,466
 
$2,681
 
$61,557
 
$246,228
 
100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL SHARES OUTSTANDING (AS OF JULY 31, 2015) 100,418,862
 
Land held for development

$16,952

 
Construction in progress
8,284

 
Mortgage notes receivable
1,900

 
Subtotal

$27,136

 
 
 
+
ADD: OTHER ASSETS
 
 
Assets held for sale(4)

$24,706

 
Reposition properties (net book value)(2)
10,879

 
Cash and other assets(5)
89,614

 
Subtotal

$125,199

 
 
 
 
 
 
-
SUBTRACT: DEBT
 
 
Unsecured credit facility

$158,000

 
Unsecured term loan
200,000

 
Senior notes
896,153

 
Mortgage notes payable
134,644

 
Other liabilities(6)
87,239

 
Subtotal

$1,476,036


(1)
See Same Store Properties schedule on page 14 for details on same store NOI.
(2)
Reposition properties includes 19 properties, which comprises 1,169,789 square feet. The NOI table above includes 12 of these properties comprising 937,569 square feet that have generated positive NOI totaling approximately $1.5 million. The remaining 7 properties, comprising 232,220 square feet, have generated a NOI loss of approximately $0.2 million and are reflected at a net book value of $10.9 million in the table below.
(3)
Same store NOI is adjusted to reflect quarterly NOI from properties acquired during the prior five quarters and development conversions adjustments represent an estimated full annual stabilization rate of $27.5 million.
(4)
Assets held for sale includes three real estate properties that are excluded from same store NOI and reflect net book value or the contractual purchase price, if applicable.
(5)
Includes cash of $8.4 million and other assets of $81.2 million that are expected to generate future cash or NOI and assets that are currently causing non-cash reductions to NOI. Other assets include prepaid assets of $64.0 million and above-market intangible assets (net) of $17.2 million.
(6)
Includes only liabilities that are expected to reduce future cash or NOI and that are currently producing non-cash benefits to NOI. Included are accounts payable and accrued liabilities of $57.3 million, pension plan liability of $19.6 million, security deposits of $5.8 million, market-rate lease intangibles of $4.1 million, and deferred operating expense reimbursements of $0.5 million. Also, excludes deferred revenue of $36.1 million.

 
 
 
 
 
 
HEALTHCARE REALTY I 17
 
2Q I 2015 SUPPLEMENTAL INFORMATION


Components of Expected 2015 FFO
(dollars in thousands, except per square foot data)
SAME STORE QUARTERLY RANGE OF EXPECTATIONS
 
 
 
 
 
 
Low

 
High

Occupancy
 
 
 
 
Multi-Tenant
 
87.0
%
 
89.0
%
Single-Tenant Net Lease
 
100.0
%
 
100.0
%
 
 
 
 
 
Revenue per Occupied Square Foot
 
 
 
 
Multi-Tenant
 

$29.00

 

$32.00

Single-Tenant Net Lease
 

$25.00

 

$26.00

 
 
 
 
 
Multi-Tenant NOI Margin
 
55.0
%
 
60.0
%
 
 
 
 
 
Multi-Tenant Contractual Rent Increases by Type (% of SF)
 
 
 
 
Annual Increase
 
80.0
%
 
90.0
%
Non-annual Increase
 
7.5
%
 
10.0
%
No Increase (term < 1 year)
 
3.0
%
 
5.0
%
No Increase (term > 1 year)
 
4.0
%
 
6.0
%
 
 
 
 
 
Contractual increases for in-place leases ("annual bumps")
 
 
 
 
Multi-Tenant
 
2.9
%
 
3.1
%
Single-Tenant Net Lease
 
2.0
%
 
3.0
%
 
 
 
 
 
Multi-Tenant Cash Leasing Spreads
 
1.0
%
 
5.0
%
 
 
 
 
 
Multi-Tenant Lease Retention Rate
 
75.0
%
 
90.0
%
 
 
 
 
 
ANNUAL RANGE OF EXPECTATIONS
 
 
 
 
 
 
Low

 
High

Same Store NOI Growth
 
 
 
 
Multi-Tenant (1)
 
6.0
%
 
8.0
%
Single-Tenant Net Lease (2)
 
3.0
%
 
4.0
%
 
 
 
 
 
Normalized G&A
 
$24,500
 
$26,500
 
 

 

Funding Activity
 
 
 
 
Acquisitions
 
$100,000
 
$150,000
Dispositions
 
(125,000)
 
(150,000)
Development
 
10,000
 
20,000
Redevelopment/Reposition
 
30,000
 
40,000
Capital Additions
 
 
 
 
   Revenue enhancing
 
6,000
 
10,000
   Routine and non-revenue enhancing
 
8,000
 
12,000
1st Generation Tenant Improvements
 
10,000
 
15,000
2nd Generation Tenant Improvements
 
12,000
 
18,000
 
 
 
 
 
Cash Yield
 
 
 
 
Acquisitions
 
5.75
%
 
6.25
%
Dispositions
 
5.75
%
 
6.25
%
Development (stabilized)
 
6.75
%
 
8.00
%
Redevelopment (stabilized)
 
7.50
%
 
8.50
%
 
 
 
 
 
Leverage (Debt/Cap)
 
40.0
%
 
45.0
%
(1)
The expected same store NOI growth of the multi-tenant properties include the effect of the development conversion properties that were added to same store in the first quarter of 2015. Long-term same store NOI Growth, excluding changes in occupancy, is expected to range between 2% and 4%.
(2)
The expected long-term same store NOI growth of the single-tenant net lease properties is expected to range between 2% and 3%.


 
 
 
 
 
 
HEALTHCARE REALTY I 18
 
2Q I 2015 SUPPLEMENTAL INFORMATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


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