Healthcare Realty Trust 8K Reports Results for the First Quarter | SEC 1 May 19

1Q2019

Supplemental Information

FURNISHED AS OF MAY 1, 2019 - UNAUDITED

FORWARD LOOKING STATEMENTS & 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,” "predictive," “annualized,” “expect,” “expected,” “range of expectations,” "would have been," "budget," 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, 2018 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.

Table of Contents



4		Highlights
5		Salient Facts
6		Corporate Information
7		Balance Sheet
8		Statements of Income
9		FFO, Normalized FFO, & FAD
10		Capital Funding & Commitments
11		Debt Metrics
12		Acquisition & Disposition Activity
13		Re/Development Activity
14		Portfolio
15		Associated Health Systems
16		Top Tenants
17		MOB Proximity to Hospital
18		Lease Maturity, Lease & Building Size
19		Historical Occupancy
20		Occupancy Reconciliation
21		Same Store Leasing Statistics
22		Same Store Performance
23		Reconciliation of NOI
24		Reconciliations of NOI & EBITDA
25		Components of Net Asset Value
26		Components of Expected FFO

Copies of this report may be obtained at www.healthcarerealty.com or by contacting Investor Relations at 615.269.8175 or communications@healthcarerealty.com.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 3

Highlights

QUARTERLY HIGHLIGHTS


•	Same store cash NOI for the first quarter increased 4.1% over the first quarter of 2018. For the trailing twelve months ended March 31, 2019, same store cash NOI grew 3.5%:


◦	Revenues increased 2.7% and revenue per average occupied square foot increased 2.8%.


◦	Operating expenses increased 1.4%.


◦	Average occupancy was stable, decreasing by 10 basis points.


•	Predictive growth measures in the same store multi-tenant portfolio include:


◦	In-place contractual rent increases averaged 2.91%, up from 2.81% a year ago, partially attributable to future annual contractual increases of 3.09% for leases commencing in the quarter.


◦	Weighted average cash leasing spreads were 3.3% on 541,000 square feet renewed:


◦	7% (<0% spread)


◦	2% (0-3%)


◦	69% (3-4%)


◦	22% (>4%)


◦	Tenant retention was 85.5%.


•	Leasing activity in the first quarter totaled 669,000 square feet related to 149 leases:


◦	575,000 square feet of renewals


◦	94,000 square feet of new and expansion leases


•	Year-to-date acquisitions of $121.0 million included four properties totaling 350,000 square feet that were 89% leased:


◦	In March, the Company acquired two medical office buildings on AA+ rated Inova Health's Fair Oaks Hospital campus in Washington, D.C. for $46.0 million. The 75% leased buildings total 158,000 square feet.


◦	Also in March, the Company acquired a medical office building on AA rated Indiana University Health's Methodist Hospital campus in Indianapolis for $47.0 million. The 143,000 square foot building is 100% leased.


◦	In April, the Company acquired a medical office building adjacent to AA- rated Piedmont Healthcare's hospital in the Buckhead area of Atlanta for $28.0 million. The 48,000 square foot building is 100% leased.


•	Year-to-date dispositions of $13.0 million included four medical office buildings totaling 67,000 square feet in Tucson, AZ, three of which were located off-campus.


•	On March 19, 2019, the Company completed the sale of 3.7 million shares of common stock for net proceeds of $115.8 million to fund investment activity. Also during the quarter, the Company raised $4.3 million through its at-the-market equity program.


•	Leverage decreased with net debt to adjusted EBITDA at 5.0 times.


•	A dividend of $0.30 per common share was declared for the first quarter. Dividends paid totaled $37.6 million, which equaled 77.3% of normalized FFO and 87.2% of FAD.

OTHER ITEMS OF NOTE


•	The Company incurred general and administrative expenses in the first quarter of 2019 of approximately $0.7 million due to customary increases in payroll taxes, non-cash ESPP expense and healthcare savings account fundings. Approximately $0.6 million is not expected to recur in subsequent quarters in 2019.


•	The Company's last remaining property operating agreement expired in February 2019. The Company recognized $0.1 million of income related to this agreement in the first quarter of 2019 which will not recur in subsequent quarters.


•	The Company issued 3,737,500 shares in an underwritten public offering on March 19, 2019. The first quarter weighted average shares outstanding included the impact of approximately 0.5 million shares due to the timing of the offering. The second quarter weighted average shares outstanding will increase by the remaining 3.2 million shares.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 4

Salient Facts

AS OF MARCH 31, 2019



	Properties

	$4.0B invested in 201 properties
	15.0M SF owned in 26 states
	11.3M SF managed by Healthcare Realty
	93.1% medical office and outpatient
	87.9% on/adjacent to hospital campuses
	3.5% same store cash NOI growth (TTM)


	Capitalization

	$5.3B enterprise value as of 4/26/2019
	$4.0B market capitalization as of 4/26/2019
	129.2M shares outstanding
	$0.30 quarterly dividend per share
	BBB/Baa2 credit rating
	24.6% debt to enterprise value at 3/31/2019
	5.0x net debt to adjusted EBITDA




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 5

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. As of March 31, 2019, the Company owned 201 real estate properties in 26 states totaling 15.0 million square feet and was valued at approximately $5.5 billion. The Company provided leasing and property management services to 11.3 million square feet nationwide.

CORPORATE HEADQUARTERS

Healthcare Realty Trust Incorporated

3310 West End Avenue, Suite 700

Nashville, Tennessee 37203

Phone 615.269.8175 Fax 615.269.8461

communications@healthcarerealty.com

www.healthcarerealty.com

EXECUTIVE OFFICERS

David R. Emery

Executive Chairman of the Board

Todd J. Meredith

President and Chief Executive Officer

John M. Bryant, Jr.

Executive Vice President and General Counsel

J. Christopher Douglas

Executive Vice President and Chief Financial Officer

Robert E. Hull

Executive Vice President - Investments

ANALYST COVERAGE

BMO Capital Markets

BTIG, LLC

CapitalOne Securities, Inc.

Green Street Advisors, Inc.

J.P. Morgan Securities LLC

Jefferies LLC

JMP Securities LLC

KeyBanc Capital Markets Inc.

Mizuho Securities USA Inc

Morgan Stanley

Raymond James & Associates

SMBC Nikko Securities America, Inc.

Stifel, Nicolaus & Company, Inc.

SunTrust Robinson Humphrey, Inc.

Wells Fargo Securities, LLC

BOARD OF DIRECTORS

David R. Emery

Executive Chairman of the Board

Healthcare Realty Trust Incorporated

Nancy H. Agee

President and Chief Executive Officer

Carilion Clinic

Edward H. Braman

Retired Audit Partner

Ernst & Young LLP

Peter F. Lyle

Vice President

Medical Management Associates, Inc.

Todd J. Meredith

President and Chief Executive Officer

Healthcare Realty Trust Incorporated

Edwin B. Morris III

Retired Managing Director

Morris & Morse Company, Inc.

J. Knox Singleton

Retired Chief Executive Officer

Inova Health System

Bruce D. Sullivan

Retired Audit Partner

Ernst & Young LLP

Christann M. Vasquez

President

Dell Seton Medical Center at University of Texas

Seton Medical Center Austin

Seton Shoal Creek Hospital




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 6

Balance Sheet

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA



ASSETS
	1Q 2019			4Q 2018			3Q 2018			2Q 2018			1Q 2018
Real estate properties
Land		$230,206			$230,206			$217,322			$214,755			$201,090
Buildings, improvements and lease intangibles	3,757,260			3,675,415			3,669,852			3,668,938			3,600,826
Personal property	10,739			10,696			10,454			10,355			10,205
Construction in progress	40,326			33,107			26,960			23,102			14,990
Land held for development	24,647			24,647			24,645			24,633			20,123
Total real estate properties	4,063,178			3,974,071			3,949,233			3,941,783			3,847,234
Less accumulated depreciation and amortization	(1,035,800		)	(1,015,174		)	(989,585		)	(959,732		)	(924,304		)
Total real estate properties, net	3,027,378			2,958,897			2,959,648			2,982,051			2,922,930
Cash and cash equivalents	11,313			8,381			10,027			7,414			3,796
Assets held for sale, net	10,568			9,272			8,826			8,788			36,118
Operating lease right-of-use assets ¹	128,141			—			—			—			—
Financing lease right-of-use assets ¹	9,259			—			—			—			—
Other assets	175,864			214,697			222,582			216,437			220,576
Total assets		$3,362,523			$3,191,247			$3,201,083			$3,214,690			$3,183,420

LIABILITIES AND STOCKHOLDERS' EQUITY
	1Q 2019			4Q 2018			3Q 2018			2Q 2018			1Q 2018
Liabilities
Notes and bonds payable		$1,343,110			$1,345,984			$1,344,759			$1,335,732			$1,306,951
Accounts payable and accrued liabilities	61,519			80,411			72,927			66,490			62,318
Liabilities of properties held for sale	633			587			141			340			201
Operating lease liabilities ¹	91,044			—			—			—			—
Financing lease liabilities ¹	14,294			—			—			—			—
Other liabilities	46,144			47,623			43,004			44,072			49,402
Total liabilities	1,556,744			1,474,605			1,460,831			1,446,634			1,418,872
Commitments and contingencies
Stockholders' equity
Preferred stock, $.01 par value; 50,000 shares authorized	—			—			—			—			—
Common stock, $.01 par value; 300,000 shares authorized	1,292			1,253			1,252			1,252			1,252
Additional paid-in capital	3,302,814			3,180,284			3,181,263			3,178,514			3,175,809
Accumulated other comprehensive income (loss)	(1,611		)	(902		)	473			5			(639		)
Cumulative net income attributable to common stockholders	1,093,010			1,088,119			1,071,804			1,065,256			1,027,528
Cumulative dividends	(2,589,726		)	(2,552,112		)	(2,514,540		)	(2,476,971		)	(2,439,402		)
Total stockholders' equity	1,805,779			1,716,642			1,740,252			1,768,056			1,764,548
Total liabilities and stockholders' equity		$3,362,523			$3,191,247			$3,201,083			$3,214,690			$3,183,420

Beginning in the first quarter of 2019 with the adoption of Accounting Standards Codification Topic 842, the Company recorded the present value of future lease payments on the Condensed Consolidated Balance Sheet. This amount was recorded as a right-of-use asset with a corresponding lease liability. The right-of-use asset also includes prepaid leases and acquisition market rate intangibles. The Company's leases where it is the lessee are primarily ground leases. All of the Company's ground leases that were in-place as of December 31, 2018 were recorded as operating leases. The Company assumed two ground leases in connection with an acquisition in the first quarter that were classified as finance leases.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 7

Statements of Income

DOLLARS IN THOUSANDS




	1Q 2019			4Q 2018			3Q 2018			2Q 2018			1Q 2018			4Q 2017			3Q 2017			2Q 2017
Revenues
Rental income		$110,696			$111,149			$111,452			$109,566			$110,229			$105,806			$105,078			$103,384
Other operating	1,961			2,019			2,010			2,068			1,895			1,943			1,947			1,934
	112,657			113,168			113,462			111,634			112,124			107,749			107,025			105,318
Expenses
Property operating	42,725			42,815			44,135			41,737			41,818			40,590			40,628			38,184
General and administrative	8,510			8,534			8,504			8,373			9,101			8,272			8,021			8,005
Acquisition and pursuit costs ¹	305			200			141			120			277			302			507			785
Depreciation and amortization	42,662			42,437			42,061			40,130			39,573			37,324			35,873			34,823
Bad debts, net of recoveries ²	—			18			(62		)	104			—			(17		)	4			105
	94,202			94,004			94,779			90,464			90,769			86,471			85,033			81,902
Other income (expense)
Gain on sales of real estate properties	15			10,787			1,288			29,590			—			—			(7		)	16,124
Interest expense	(13,588		)	(13,602		)	(13,464		)	(13,069		)	(12,668		)	(13,707		)	(14,107		)	(14,315		)
Loss on extinguishment of debt	—			—			—			—			—			(44,985		)	—			—
Impairment of real estate assets	—			—			—			—			—			2			(5,059		)	(5		)
Interest and other income, net	9			(35		)	41			38			493			261			354			4
	(13,564		)	(2,850		)	(12,135		)	16,559			(12,175		)	(58,429		)	(18,819		)	1,808
Net income (loss)		$4,891			$16,314			$6,548			$37,729			$9,180			($37,151	)		$3,173			$25,224


1	Includes third party and travel costs related to the pursuit of acquisitions and developments.


2	Beginning in the first quarter of 2019 with the adoption of Accounting Standards Codification Topic 842, bad debts, net of recoveries associated with lease revenue was recorded within rental income.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 8

FFO, Normalized FFO, & FAD ^{1, 2}

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA




	1Q 2019			4Q 2018			3Q 2018			2Q 2018			1Q 2018			4Q 2017			3Q 2017			2Q 2017
Net income (loss)		$4,891			$16,314			$6,548			$37,729			$9,180			($37,151	)		$3,173			$25,224
Gain on sales of real estate assets	(15		)	(10,787		)	(1,288		)	(29,590		)	—			—			7			(16,124		)
Impairments of real estate assets	—			—			—			—			—			(2		)	5,059			5
Real estate depreciation and amortization	43,383			43,380			42,723			40,747			40,003			37,869			36,478			35,421
FFO		$48,259			$48,907			$47,983			$48,886			$49,183			$716			$44,717			$44,526
Acquisition and pursuit costs ³	305			200			141			120			277			302			507			785
Lease intangible amortization ⁴	84			—			—			—			—			—			—			—
Revaluation of awards upon retirement	—			—			70			—			—			—			—			—
Forfeited earnest money received	—			—			—			—			(466		)	—			—			—
Debt financing costs	—			—			—			—			—			45,773			—			—
Normalized FFO		$48,648			$49,107			$48,194			$49,006			$48,994			$46,791			$45,224			$45,311
Non-real estate depreciation and amortization	1,465			1,439			1,506			1,481			1,466			1,439			1,388			1,369
Provision for bad debt, net	(75		)	18			(62		)	104			—			(17		)	4			105
Straight-line rent income, net	(270		)	(302		)	(413		)	(683		)	(1,330		)	(201		)	(1,156		)	(1,623		)
Stock-based compensation	2,639			2,601			2,605			2,593			2,822			2,531			2,429			2,453
Normalized FFO adjusted for non-cash items	52,407			52,863			51,830			52,501			51,952			50,543			47,889			47,615
2nd generation TI	(4,326		)	(10,367		)	(6,950		)	(7,755		)	(5,867		)	(6,929		)	(4,481		)	(3,680		)
Leasing commissions paid	(1,483		)	(2,182		)	(1,139		)	(1,947		)	(1,851		)	(2,705		)	(1,826		)	(984		)
Capital expenditures	(3,462		)	(2,817		)	(6,229		)	(7,117		)	(4,184		)	(6,400		)	(4,203		)	(5,667		)
FAD		$43,136			$37,497			$37,512			$35,682			$40,050			$34,509			$37,379			$37,284
Dividends paid		$37,614			$37,571			$37,570			$37,569			$37,556			$37,467			$34,964			$34,961
FFO per common share - diluted		$0.39			$0.39			$0.39			$0.39			$0.40			$0.01			$0.37			$0.38
Normalized FFO per common share - diluted		$0.39			$0.40			$0.39			$0.40			$0.40			$0.38			$0.38			$0.39
FFO weighted average common shares outstanding - diluted⁵	124,928			124,240			124,192			123,983			123,984			124,125			120,081			115,674

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 “net income (computed in accordance with GAAP) excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.”

FFO, Normalized FFO and Funds Available for Distribution ("FAD") do 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, Normalized FFO and FAD 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.


3	Acquisition and pursuit costs include third party and travel costs related to the pursuit of acquisitions and developments.

The Company adopted the 2018 NAREIT FFO White Paper Restatement during the first quarter of 2019. This amended definition specifically includes the impact of acquisition related market lease intangible amortization in the calculation of NAREIT FFO. The Company historically included this amortization in the real estate depreciation and amortization line item which is added back in the calculation of NAREIT FFO. Prior periods were not restated for the adoption.


5	Diluted weighted average common shares outstanding for the three months ended March 31, 2019 includes the dilutive effect of nonvested share-based awards outstanding of 696,432.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 9

Capital Funding & Commitments

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA



ACQUISITION AND RE/DEVELOPMENT FUNDING
	1Q 2019		4Q 2018		3Q 2018		2Q 2018		1Q 2018
Acquisitions	$93,000		$36,950		$4,150		$70,350			$—
Re/development	7,281		6,895		5,016		10,998		12,658
1st gen. TI & acq. cap. ex. ¹	2,752		3,394		3,866		4,668		1,194

MAINTENANCE CAPITAL EXPENDITURES
	1Q 2019		4Q 2018		3Q 2018		2Q 2018		1Q 2018
$ Spent
2nd generation TI	$4,326		$10,367		$6,950		$7,755		$5,867
Leasing commissions paid	1,483		2,182		1,139		1,947		1,851
Capital expenditures	3,462		2,817		6,229		7,117		4,184
	$9,271		$15,366		$14,318		$16,819		$11,902
% of NOI
2nd generation TI	6.2	%	14.8	%	10.1	%	11.2	%	8.5		%
Leasing commissions paid	2.1	%	3.1	%	1.6	%	2.8	%	2.7		%
Capital expenditures	5.0	%	4.0	%	9.0	%	10.3	%	6.1		%
	13.3	%	21.9	%	20.7	%	24.3	%	17.3		%

LEASING COMMITMENTS
	1Q 2019		4Q 2018		3Q 2018		2Q 2018		1Q 2018
Renewals
Square feet	575,195		341,032		572,554		346,539		309,665
2nd generation TI/square foot/lease year	$2.12		$1.69		$1.50		$2.48		$1.86
Leasing commissions/square foot/lease year	$0.60		$0.49		$0.75		$0.57		$0.56
WALT (in months) ²	46.3		51.4		34.0		75.6		51.8

New leases
Square feet	78,947		104,248		79,545		95,542		140,884
2nd generation TI/square foot/lease year	$5.06		$4.72		$4.28		$4.04		$5.42
Leasing commissions/square foot/lease year	$0.91		$1.23		$1.14		$0.84		$1.06
WALT (in months) ²	59.6		72.8		58.5		63.8		93.8

All
Square feet	654,142		445,280		652,099		442,081		450,549
2nd generation TI/square foot/lease year	$2.56		$2.60		$2.03		$2.77		$3.47
Leasing commissions/square foot/lease year	$0.64		$0.72		$0.82		$0.62		$0.79
Leasing commitments as a % of annual net rent	14.4	%	16.0	%	12.0	%	15.8	%	20.7		%
WALT (in months) ²	47.9		56.4		37.0		73.0		64.9


1	Planned capital expenditures for acquisitions include expected near-term fundings that were contemplated as part of the acquisition.


2	WALT = weighted average lease term.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 10

Debt Metrics

DOLLARS IN THOUSANDS



SUMMARY OF INDEBTEDNESS AS OF MARCH 31, 2019
	INTEREST EXPENSE	PRINCIPAL BALANCE	BALANCE ¹	MONTHS TO MATURITY	CONTRACTUAL RATE		EFFECTIVE RATE
Senior notes due April 2023	$2,396	$250,000	$248,223	49	3.75	%	3.95	%
Senior notes due May 2025 ²	2,469	250,000	248,338	73	3.88	%	4.08	%
Senior notes due January 2028	2,773	300,000	295,309	105	3.63	%	3.84	%
Total senior notes outstanding	$7,638	$800,000	$791,870	77	3.74	%	3.95	%
$700 million unsecured credit facility due July 2020	2,269	260,000	260,000	16	LIBOR + 1.00%		3.49	%
Unsecured term loan facility due December 2022 ³	1,326	150,000	149,234	45	LIBOR + 1.10%		3.53	%
Mortgage notes payable, net	1,704	141,922	142,006	58	4.96	%	4.79	%
Total outstanding notes and bonds payable	$12,937	$1,351,922	$1,343,110	60	3.80	%	3.90	%
Interest cost capitalization	(307)
Unsecured credit facility fee and deferred financing costs	958
Total quarterly consolidated interest expense	$13,588



SELECTED FINANCIAL DEBT COVENANTS TTM ENDED MARCH 31, 2019 ⁴
	CALCULATION	REQUIREMENT	PER DEBT COVENANTS		EXCLUDING ⁵ LEASE ACCOUNTING IMPACT
Revolving credit facility and term loan
Leverage ratio	Total debt/total capital	Not greater than 60%	33.8	%	32.1	%
Secured leverage ratio	Total secured debt/total capital	Not greater than 30%	3.5	%	3.4	%
Unencumbered leverage ratio	Unsecured debt/unsecured real estate	Not greater than 60%	35.3	%	32.7	%
Fixed charge coverage ratio	EBITDA/fixed charges	Not less than 1.50x	4.2x		4.2x
Unsecured coverage ratio	Unsecured EBITDA/unsecured interest	Not less than 1.75x	4.8x		4.8x
Construction and development	CIP/total assets	Not greater than 15%	1.2	%	1.3	%
Asset investments	Mortgages & unimproved land/total assets	Not greater than 20%	1.0	%	1.0	%

Senior notes ⁶
Incurrence of total debt	Total debt/total assets	Not greater than 60%	33.6	%	32.2	%
Incurrence of debt secured by any lien	Secured debt/total assets	Not greater than 40%	3.5	%	3.4	%
Maintenance of total unsecured assets	Unencumbered assets/unsecured debt	Not less than 150%	290.9	%	313.7	%
Debt service coverage	EBITDA/interest expense	Not less than 1.5x	4.8x		4.8x

Other
Net debt to adjusted EBITDA ⁷	Net debt (debt less cash)/adjusted EBITDA	Not required	5.0x		5.0x
Debt to enterprise value ⁸	Debt/enterprise value	Not required	24.6	%	24.6	%


1	Balances are reflected net of discounts and deferred financing costs and include premiums.


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


3	The effective interest rate includes the impact of interest rate swaps on $25.0 million and $50.0 million of the outstanding balance at a rate of 2.18% and 2.46%, respectively (plus the applicable margin rate, currently 110 basis points).


4	Does not include all financial and non-financial covenants and restrictions that are required by the Company's various debt agreements.


5	Excludes the impact of the adoption of Topic 842, Leases where lease liabilities are considered debt per the covenant definitions.


6	The senior note covenants calculations apply to the senior notes due 2025 and 2028. The senior notes due 2023 have similar covenants but contain a less restrictive definition of total assets.


7	Adjusted EBITDA is based on the current quarter results, annualized. See page 24 for a reconciliation of adjusted EBITDA. Net debt does not include lease liabilities.


8	Based on the closing price of $32.11 on March 31, 2019 and 129,214,091 shares outstanding. Debt does not include lease liabilities.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 11

Acquisition & Disposition Activity

DOLLARS IN THOUSANDS



ACQUISITION ACTIVITY
LOCATION	TYPE ¹	MILES TO CAMPUS	ASSOCIATED HEALTH SYSTEM	CLOSING	PURCHASE PRICE	SQUARE FEET	LEASED %		CAP RATE ²
Washington D.C.³	MOB	0.00	Inova Health	3/28/2019	$46,000	158,338	75	%	5.2	%
Indianapolis, IN	MOB	0.00	Indiana University Health	3/28/2019	47,000	143,499	100	%	5.1	%
Atlanta, GA	MOB	0.14	Piedmont Healthcare	4/2/2019	28,000	47,963	100	%	5.7	%
Total					$121,000	349,800	89	%	5.3	%



DISPOSITION ACTIVITY
LOCATION	TYPE ¹	MILES TO CAMPUS	ASSOCIATED HEALTH SYSTEM	CLOSING	SALES PRICE	SQUARE FEET	LEASED %		CAP RATE ⁴
Tucson, AZ⁵	MOB	Varies	Tenet ⁵	4/9/2019	$13,000	67,345	95	%	6.2	%
Total					$13,000	67,345	95	%	6.2	%



HISTORICAL INVESTMENT ACTIVITY
	ACQUISITIONS		RE/DEVELOPMENT FUNDING		TOTAL INVESTMENTS		DISPOSITIONS
2015	$187,216		$27,859		$215,075		$157,975
2016	241,939		45,343		287,282		94,683
2017	327,167		32,305		359,472		122,700
2018	111,450		35,567		147,017		98,691
YTD 2019	121,000		7,281		128,281		12,573
Average (2015-2018)	216,942		35,269		252,212		118,512
% of Total	86.0	%	14.0	%	100.0	%


1	MOB = Medical office building


2	For acquisitions, cap rate represents the forecasted first year NOI / purchase price.


3	Includes two properties.


4	For dispositions, cap rate represents the in-place cash NOI / sales price.


5	Includes three off-campus medical office buildings and one on-campus medical office building sold to a single purchaser. The associated health system is Tenet for three of these buildings.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 12

Re/Development Activity

DOLLARS IN THOUSANDS



RE/DEVELOPMENT ACTIVITY
LOCATION	CAMPUS LOCATION	SQUARE FEET	BUDGET	FUNDINGS THRU 3/31/2019	REMAINING FUNDINGS	LEASED %		EXPECTED CASH NOI AT LEASED %	EXPECTED STABILIZED YIELD
Same store redevelopment
Charlotte, NC ¹	ON	38,000	$12,000	$9,684	$2,316	81	%	$159	7.2	%
Development
Seattle, WA	ON	151,000	64,120	30,943	33,177	60	%	617	7.0	%
Total		189,000	$76,120	$40,627	$35,493	64	%	$776



RE/DEVELOPMENT EXPECTED CASH NOI AND OCCUPANCY RAMP UP TO LEASED %
LOCATION	INITIAL OCCUPANCY	Q2 2019		Q3 2019		Q4 2019		Q1 2020		Q2 2020		Q3 2020
Same store redevelopment
Charlotte, NC ¹
Cash NOI		$25		$159		$159		$159		$160		$160
Average Occupancy	Q2 2019	41	%	81	%	81	%	81	%	81	%	81	%
Development
Seattle, WA
Cash NOI		—		—		$(62)		$407		$617		$617
Average Occupancy	Q4 2019	—	%	—	%	10	%	40	%	60	%	60	%
Total Cash NOI		$25		$159		$97		$566		$777		$777


1	Redevelopment project is a 38,000 square foot expansion to an existing medical office building. When complete, the building will be 204,000 square feet.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 13

Portfolio

DOLLARS IN THOUSANDS



MARKETS (BY SQUARE FEET)
				MOB 93.1%				NON-MOB 6.9%
MARKET	MSA RANK	INVESTMENT ¹	COUNT	MULTI-TENANT		SINGLE-TENANT		INPATIENT REHAB ²		INPATIENT SURGICAL		OFFICE		TOTAL		% OF TOTAL
Dallas, TX	4	$482,852	25	2,004,574						156,245		145,365		2,306,184		15.4	%
Seattle, WA	15	469,743	19	1,049,651		67,510								1,117,161		7.4	%
Nashville, TN	36	198,754	6	766,523								108,691		875,214		5.8	%
Charlotte, NC	22	167,609	16	820,457										820,457		5.5	%
Los Angeles, CA	2	186,307	12	594,163				63,000						657,163		4.4	%
Denver, CO	19	148,987	9	557,368								93,869		651,237		4.3	%
Houston, TX	5	133,093	8	533,857								57,170		591,027		3.9	%
Richmond, VA	44	148,008	7	548,801										548,801		3.7	%
Des Moines, IA	87	140,267	7	197,994		181,961						152,655		532,610		3.5	%
Indianapolis, IN	33	119,360	4	526,194										526,194		3.5	%
Memphis, TN	43	95,510	7	515,876										515,876		3.4	%
Washington, DC	6	151,724	6	507,336										507,336		3.4	%
Atlanta, GA	9	190,613	8	476,054		19,732								495,786		3.3	%
San Antonio, TX	24	96,330	7	483,811										483,811		3.2	%
Austin, TX	30	106,443	5	375,333										375,333		2.5	%
Chicago, IL	3	92,208	3	352,800										352,800		2.4	%
Oklahoma City, OK	41	121,142	3	151,507		200,000								351,507		2.3	%
Honolulu, HI	56	142,644	3	298,427										298,427		2.0	%
San Francisco, CA	12	119,842	3	286,270										286,270		1.9	%
Miami, FL	7	57,765	4	241,980										241,980		1.6	%
Colorado Springs, CO	79	53,431	3	241,224										241,224		1.6	%
Other (19 markets)		570,068	36	1,650,463		322,482		75,000		186,000		—		2,233,945		15.0	%
Total		$3,992,700	201	13,180,663		791,685		138,000		342,245		557,750		15,010,343		100.0	%
Number of properties				181		11		2		2		5		201
% of square feet				87.8	%	5.3	%	0.9	%	2.3	%	3.7	%	100.0	%
Investment¹				$3,387,073		$240,386		$20,839		$208,725		$135,677		$3,992,700
Quarterly cash NOI				$57,254		$4,872		$851		$4,767		$1,581		$69,325
% of cash NOI				82.6	%	7.0	%	1.2	%	6.9	%	2.3	%	100.0	%



BY BUILDING TYPE
	MOB TOTAL		MULTI-TENANT		SINGLE-TENANT		TOTAL
Number of properties	192		186		15		201
Square feet	13,972,348		13,738,413		1,271,930		15,010,343
% of square feet	93.1	%	91.5	%	8.5	%	100.0	%
Occupancy %	86.8	%	86.1	%	100.0	%	87.2	%
Investment¹	$3,627,459		$3,522,750		$469,950		$3,992,700
Quarterly cash NOI	$62,126		$58,835		$10,490		$69,325
% of cash NOI	89.6	%	84.9	%	15.1	%	100.0	%


1	Excludes gross assets held for sale, land held for development, construction in progress and corporate property.


2	Includes one inpatient rehab facility and one skilled nursing facility.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 14

Associated Health Systems ¹



MOB PORTFOLIO (BY SQUARE FEET)
			ASSOCIATED 95.5%²
HEALTH SYSTEM	SYSTEM RANK ³	CREDIT RATING	ON		ADJACENT ⁴		ANCHORED ⁵		OFF CAMPUS		TOTAL MOB	% OF TOTAL MOB
Baylor Scott & White Health	20	AA-/Aa3	1,834,256		142,759		163,188		—		2,140,203	15.3	%
Ascension Health	4	AA+/Aa2	1,080,681		156,328		—		—		1,237,009	8.9	%
CommonSpirit Health ⁶	3	BBB+/Baa1	807,182		291,201		95,486		—		1,193,869	8.5	%
Atrium Health	29	AA-/Aa3	353,537		98,066		313,513		—		765,116	5.5	%
Tenet Healthcare Corporation	7	B/B2	583,767		67,790		30,096		—		681,653	4.9	%
Bon Secours Health System	78	A+/--	548,801		—		—		—		548,801	3.9	%
Indiana University Health	26	AA/Aa2	423,628		102,566		—		—		526,194	3.8	%
Wellstar Health System	84	A/A2	476,054		—		—		—		476,054	3.4	%
Baptist Memorial Health Care	95	BBB+/--	424,306		—		39,345		—		463,651	3.3	%
HCA	2	BB+/Ba2	177,340		177,155		78,305		—		432,800	3.1	%
University of Colorado Health	68	AA-/Aa3	150,291		161,099		33,850		—		345,240	2.5	%
Trinity Health	6	AA-/Aa3	267,952		73,331		—		—		341,283	2.4	%
Providence St. Joseph Health	5	AA-/Aa3	176,854		129,181		—		—		306,035	2.2	%
UW Medicine (Seattle)	49	AA+/Aaa	194,536		102,540		—		—		297,076	2.1	%
Inova Health System	76	AA+/Aa2	262,121		—		—		—		262,121	1.9	%
Medstar Health	39	A/A2	241,739		—		—		—		241,739	1.7	%
Advocate Aurora Health Care	14	AA/Aa3	142,955		95,436		—		—		238,391	1.7	%
Overlake Health System	339	A/A2	191,051		39,659		—		—		230,710	1.7	%
Memorial Hermann Health	43	A+/A1	—		206,090		—		—		206,090	1.5	%
Mercy (St. Louis)	37	AA-/Aa3	—		—		200,000		—		200,000	1.4	%
MultiCare Health System	110	AA-/Aa3	154,452		33,169		—		—		187,621	1.3	%
Sutter Health	12	AA-/Aa3	175,591		—		—		—		175,591	1.3	%
Other (19 credit rated systems)			875,329		619,977		110,339		—		1,605,645	11.5	%
Subtotal - credit rated⁷			9,542,423		2,496,347		1,064,122		—		13,102,892	93.8	%
Non-credit rated			238,710		—		—		630,746		869,456	6.2	%
Total			9,781,133		2,496,347		1,064,122		630,746		13,972,348	100.0	%
% of total			70.0	%	17.9	%	7.6	%	4.5	%


1	Excludes construction in progress and assets classified as held for sale.


2	Includes total square feet of buildings located on-campus, adjacent and off-campus/anchored by healthcare systems.


3	Ranked by revenue based on Modern Healthcare's Healthcare Systems Financials Database.


4	The Company defines an adjacent property as being no more than 0.25 miles from a hospital campus.


5	Includes buildings where health systems lease 40% or more of the property.


6	Previously Catholic Health Initiatives.


7	Based on square footage, 84.9% is associated with an investment-grade rated healthcare provider.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 15

Top Tenants ¹




					LEASED SQUARE FEET
TENANT	SYSTEM RANK ²	CREDIT RATING	# OF PROPERTIES	# OF LEASES	MOB	INPATIENT	TOTAL	% OF TOTAL LEASED		% OF TTM REVENUE
Baylor Scott & White Health	20	AA-/Aa3	22	154	937,570	156,245	1,093,815	8.4	%	9.2	%
Atrium Health	29	AA-/Aa3	16	79	607,868	—	607,868	4.6	%	4.2	%
Mercy (St. Louis)	37	AA-/Aa3	2	2	200,000	186,000	386,000	2.9	%	4.1	%
CommonSpirit Health ³	3	BBB+/Baa1	16	72	567,140	—	567,140	4.3	%	3.9	%
Ascension Health	4	AA+/Aa2	11	70	420,107	—	420,107	3.2	%	2.9	%
Bon Secours Health System	78	A+/--	7	64	298,485	—	298,485	2.3	%	2.2	%
Indiana University Health	26	AA/Aa2	4	56	433,706	—	433,706	3.3	%	2.1	%
University of Colorado Health	68	AA-/Aa3	5	17	254,581	—	254,581	1.9	%	2.0	%
WellStar Health System	84	A/A2	7	42	271,927	—	271,927	2.1	%	1.9	%
Tenet Healthcare Corporation	7	B/B2	13	41	163,010	63,000	226,010	1.7	%	1.8	%
UW Medicine (Seattle)	49	AA+/Aaa	5	23	177,995	—	177,995	1.4	%	1.7	%
Proliance Surgeons	-	-	5	16	126,109	—	126,109	1.0	%	1.5	%
Baptist Memorial Health Care	95	BBB+/--	6	20	159,105	—	159,105	1.2	%	1.4	%
Eating Recovery Center	-	B-/B3	4	7	104,193	—	104,193	0.8	%	1.2	%
Medstar Health	39	A/A2	3	52	150,557	—	150,557	1.1	%	1.2	%
Trinity Health	6	AA-/Aa3	3	32	168,890	—	168,890	1.3	%	1.2	%
Providence St. Joseph Health	5	AA-/Aa3	6	22	101,039	—	101,039	0.8	%	1.1	%
MultiCare Health System	110	AA-/Aa3	3	14	118,506	—	118,506	0.9	%	0.9	%
Hawaii Pacific Health	195	--/A1	3	32	85,513	—	85,513	0.7	%	0.9	%
Labcorp of America	-	BBB/Baa2	19	22	172,589	—	172,589	1.3	%	0.8	%
Davita Kidney Care	-	BB/Ba2	12	14	108,651	—	108,651	0.8	%	0.8	%
Inova Health System	76	AA+/Aa2	3	10	90,533	—	90,533	0.7	%	0.8	%
HCA	2	BB+/Ba2	8	14	88,729	—	88,729	0.7	%	0.7	%
Overlake Health System	339	A/A2	3	6	61,218	—	61,218	0.5	%	0.6	%
Advocate Aurora Health Care	14	AA/Aa3	2	11	63,797	—	63,797	0.5	%	0.6	%
Total				892	5,931,818	405,245	6,337,063	48.4	%	49.7	%


1	Excludes construction in progress and assets classified as held for sale.


2	Ranked by revenue based on Modern Healthcare's Healthcare Systems Financials Database.


3	Previously Catholic Health Initiatives.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 16

MOB Proximity to Hospital ^{1, 2}



MEDICAL OFFICE BUILDINGS BY LOCATION
	1Q2019		4Q 2018		3Q 2018		2Q 2018		1Q 2018		4Q 2017
On campus	70.0	%	69.3	%	69.6	%	69.3	%	69.1	%	69.1	%
Adjacent to campus ³	17.9	%	18.3	%	18.1	%	17.9	%	17.6	%	17.6	%
Total on/adjacent	87.9	%	87.6	%	87.7	%	87.2	%	86.7	%	86.7	%
Off campus - anchored by health system ⁴	7.6	%	7.8	%	7.7	%	7.7	%	7.7	%	7.7	%
Off campus	4.5	%	4.6	%	4.6	%	5.1	%	5.6	%	5.6	%
	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%



DISTANCE TO HOSPITAL CAMPUS
									GROUND LEASE PROPERTIES
GREATER THAN	LESS THAN OR EQUAL TO	# OF PROPERTIES	SQUARE FEET	% OF TOTAL		CUMULATIVE %		CAMPUS PROXIMITY	SQUARE FEET	% OF TOTAL
	0.00	124	9,781,133	70.0	%	70.0	%	On campus	7,815,616	90.0	%
0.00	250 yards	23	1,362,259	9.8	%	79.8	%	Adjacent ³	80,525	0.9	%
250 yards	0.25 miles	20	1,134,088	8.1	%	87.9	%	Adjacent ³	120,036	1.4	%
0.25 miles	0.50	1	124,925	0.9	%	88.8	%	Off campus	124,925	1.4	%
0.50	1.00	2	280,873	2.0	%	90.8	%		—	—	%
1.00	2.00	5	519,446	3.7	%	94.5	%		319,446	3.7	%
2.00	5.00	8	338,246	2.4	%	96.9	%		13,818	0.2	%
5.00	10.00	5	275,189	2.0	%	98.9	%		205,631	2.4	%
10.00		4	156,189	1.1	%	100.0	%		—	—	%
Total		192	13,972,348	100.0	%				8,679,997	100.0	%


1	Excludes construction in progress and assets classified as held for sale.


2	Proximity to hospital campus includes acute care hospitals with inpatient beds. The Company does not consider inpatient rehab hospitals (IRFs), skilled nursing facilities (SNFs) or long-term acute care hospitals (LTACHs) to be hospital campuses for distance calculations.


3	The Company defines an adjacent property as being no more than 0.25 miles from a hospital campus.


4	Includes buildings where health systems lease 40% or more of the property.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 17

Lease Maturity, Lease & Building Size ¹



LEASE MATURITY SCHEDULE
	MULTI-TENANT				SINGLE-TENANT				TOTAL
	# OF LEASES	SQUARE FEET	% OF SQUARE FEET		# OF LEASES	SQUARE FEET	% OF SQUARE FEET		# OF LEASES	SQUARE FEET	% OF TOTAL SQUARE FEET		% OF BASE REVENUE ²
2019	581	2,058,626	17.4	%	1	63,000	4.9	%	582	2,121,626	16.2	%	16.0	%
2020	529	1,982,299	16.8	%	1	83,318	6.6	%	530	2,065,617	15.8	%	15.4	%
2021	433	1,598,901	13.5	%	—	—	—	%	433	1,598,901	12.2	%	11.8	%
2022	361	1,462,190	12.4	%	1	58,285	4.6	%	362	1,520,475	11.6	%	11.5	%
2023	309	1,360,788	11.5	%	—	—	—	%	309	1,360,788	10.4	%	10.7	%
2024	209	1,149,842	9.7	%	—	—	—	%	209	1,149,842	8.8	%	8.1	%
2025	104	667,374	5.7	%	2	91,561	7.2	%	106	758,935	5.8	%	5.6	%
2026	79	265,581	2.2	%	—	—	—	%	79	265,581	2.0	%	2.0	%
2027	65	324,508	2.7	%	2	342,245	26.9	%	67	666,753	5.1	%	7.6	%
2028	92	520,560	4.4	%	2	235,419	18.5	%	94	755,979	5.8	%	6.0	%
Thereafter	80	431,356	3.7	%	6	398,102	31.3	%	86	829,458	6.3	%	5.3	%
Total leased	2,842	11,822,025	86.1	%	15	1,271,930	100.0	%	2,857	13,093,955	87.2	%	100.0	%
Total building		13,738,413	100.0	%		1,271,930	100.0	%		15,010,343	100.0	%
WALTR (months) ³		41.5				99.8				47.2
WALT (months) ³		88.0				169.9				95.9



# OF LEASES BY SIZE			BY BUILDING SIZE
LEASED SQUARE FEET	MULTI-TENANT ⁴	SINGLE-TENANT	BUILDING SQUARE FEET	% OF TOTAL		TOTAL SQUARE FOOTAGE	AVERAGE SQUARE FEET	# OF PROPERTIES
0 - 2,500	1,507	—	>100,000	42.7	%	6,410,799	145,700	44
2,501 - 5,000	699	—	<100,000 and >75,000	26.4	%	3,969,516	86,294	46
5,001 - 7,500	224	—	<75,000 and >50,000	16.5	%	2,469,882	63,330	39
7,501 - 10,000	138	—	<50,000 and >25,000	11.6	%	1,744,795	37,930	46
10,001 +	274	15	<25,000	2.8	%	415,351	15,975	26
Total Leases	2,842	15	Total	100.0	%	15,010,343	74,678	201


1	Excludes land held for development, construction in progress, corporate property and assets classified as held for sale.


2	Represents the current annualized minimum rents on in-place leases, excluding the impact of potential lease renewals and sponsor support payments under financial support arrangements and straight-line rent.


3	WALTR = weighted average lease term remaining; WALT = weighted average lease term.


4	The average lease size in the multi-tenant properties is 4,160 square feet.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 18

Historical Occupancy ¹

DOLLARS IN THOUSANDS



SAME STORE PROPERTIES
	1Q 2019		4Q 2018		3Q 2018		2Q 2018		1Q 2018
Multi-tenant
Investment	$2,894,291		$2,897,873		$2,833,607		$2,738,045		$2,708,228
Number of properties	150		151		145		144		143
Total building square feet	11,432,246		11,490,212		11,341,527		11,221,175		11,236,857
Period end % occupied	88.1	%	88.6	%	88.5	%	88.3	%	87.9	%
Single-tenant
Investment	$463,261		$471,319		$482,727		$481,727		$473,636
Number of properties	14		14		15		15		14
Total building square feet	1,252,198		1,307,713		1,341,781		1,341,781		1,306,362
Period end % occupied	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Total same store properties
Investment	$3,357,552		$3,369,192		$3,316,334		$3,219,772		$3,181,864
Number of properties	164		165		160		159		157
Total building square feet	12,684,444		12,797,925		12,683,308		12,562,956		12,543,219
Period end % occupied	89.3	%	89.8	%	89.7	%	89.6	%	89.2	%

PROPERTIES NOT IN SAME STORE
	1Q 2019		4Q 2018		3Q 2018		2Q 2018		1Q 2018
Acquisitions ²
Investment	$520,418		$437,835		$464,185		$557,434		$526,129
Number of properties	24		22		26		27		24
Total building square feet	1,648,552		1,381,323		1,470,154		1,644,315		1,383,200
Period end % occupied	91.0	%	92.5	%	91.9	%	92.7	%	92.7	%
Development completions
Investment	$29,388		$29,375		$29,122		$28,970		$31,929
Number of properties	1		1		1		1		2
Total building square feet	99,957		99,957		99,957		99,957		112,837
Period end % occupied	41.8	%	38.4	%	38.4	%	29.9	%	34.9	%
% leased	41.8	%	41.8	%	41.8	%	41.8	%	48.4	%
Reposition ³
Investment	$85,342		$74,415		$82,354		$82,251		$66,538
Number of properties	12		11		14		14		13
Total building square feet	577,390		519,424		574,396		574,396		471,604
Period end % occupied	39.1	%	35.7	%	47.0	%	48.5	%	47.6	%

TOTAL PROPERTIES
	1Q 2019		4Q 2018		3Q 2018		2Q 2018		1Q 2018
Investment	$3,992,700		$3,910,817		$3,891,995		$3,888,427		$3,806,460
Number of properties	201		199		201		201		196
Total building square feet	15,010,343		14,798,629		14,827,815		14,881,624		14,510,860
Period end % occupied	87.2	%	87.8	%	87.9	%	87.9	%	87.7	%


1	Excludes land held for development, construction in progress, corporate property and assets classified as held for sale.


2	Acquisition includes properties acquired within the last 8 quarters of the period presented and are excluded from same store.


3	Reposition includes properties that meet any of the Company-defined criteria: properties having less than 60% occupancy that is expected to last at least two quarters; properties that experience a loss of occupancy over 30% in a single quarter; or properties with negative net operating income that is expected to last at least two quarters.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 19

Occupancy Reconciliation

SQUARE FEET



SEQUENTIAL
	PORTFOLIO								SAME STORE
	COUNT		OCCUPIED		TOTAL		%		COUNT		OCCUPIED		TOTAL		%
Beginning December 31, 2018	199		12,990,403		14,798,629		87.8	%	165		11,488,129		12,797,925		89.8	%
Portfolio activity
Acquisitions	3		259,138		301,837		85.9	%	NA		NA		NA		NA
Re/development completions	—		—		—		—	%	—		—		—		—	%
Dispositions ¹	(1	)	(90,123	)	(90,123	)	100.0	%	(1	)	(90,123	)	(90,123	)	100.0	%
Same store reclassifications
Acquisitions	NA		NA		NA		NA		1		34,608		34,608		100.0	%
Development completions	NA		NA		NA		NA		—		—		—		—	%
Reposition to same store	NA		NA		NA		NA		—		—		—		—	%
Reposition from same store	NA		NA		NA		NA		(1	)	(37,519	)	(57,966	)	64.7	%
	201		13,159,418		15,010,343		87.7	%	164		11,395,095		12,684,444		89.8	%
Leasing activity
New leases/expansions	NA		93,722		NA		NA		NA		60,756		NA		NA
Move-outs/contractions	NA		(159,185	)	NA		NA		NA		(130,329	)	NA		NA
Net absorption	NA		(65,463	)	NA		NA		NA		(69,573	)	NA		NA
Ending March 31, 2019	201		13,093,955		15,010,343		87.2	%	164		11,325,522		12,684,444		89.3	%

YEAR-OVER-YEAR
	PORTFOLIO								SAME STORE
	COUNT		OCCUPIED		TOTAL		%		COUNT		OCCUPIED		TOTAL		%
Beginning March 31, 2018	196		12,733,020		14,510,860		87.7	%	157		11,186,862		12,543,219		89.2	%
Portfolio activity
Acquisitions	10		698,725		813,259		85.9	%	NA		NA		NA		NA
Re/development completions			—		—		—	%	—		—		—		—	%
Dispositions ¹	(5	)	(281,788	)	(313,776	)	89.8	%	(4	)	(249,476	)	(276,466	)	90.2	%
Same store reclassifications
Acquisitions	NA		NA		NA		NA		10		490,054		547,907		89.4	%
Development completions	NA		NA		NA		NA		1		12,880		12,880		100.0	%
Reposition to same store	NA		NA		NA		NA		3		64,469		82,037		78.6	%
Reposition from same store	NA		NA		NA		NA		(3	)	(151,377	)	(225,133	)	67.2	%
	201		13,149,957		15,010,343		87.6	%	164		11,353,412		12,684,444		89.5	%
Leasing activity
New leases/expansions	NA		470,695		NA		NA		NA		381,469		NA		NA
Move-outs/contractions	NA		(526,697	)	NA		NA		NA		(409,359	)	NA		NA
Net absorption	NA		(56,002	)	NA		NA		NA		(27,890	)	NA		NA
Ending March 31, 2019	201		13,093,955		15,010,343		87.2	%	164		11,325,522		12,684,444		89.3	%


1	Includes properties reclassified as held for sale.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 20

Same Store Leasing Statistics¹




	1Q 2019		4Q 2018		3Q 2018		2Q 2018		1Q 2018		4Q 2017		3Q 2017		2Q 2017
Average in-place contractual increases
Multi-tenant	2.91	%	2.91	%	2.88	%	2.84	%	2.81	%	2.80	%	2.78	%	2.74	%
Single-tenant	2.46	%	2.45	%	2.42	%	2.13	%	2.12	%	2.12	%	2.10	%	2.04	%
	2.85	%	2.84	%	2.82	%	2.73	%	2.71	%	2.69	%	2.65	%	2.61	%
Multi-tenant renewals
Cash leasing spreads	3.3	%	(0.5	%)	3.8	%	6.4	%	5.2	%	3.7	%	4.6	%	9.5	%
Tenant retention rate	85.5	%	82.6	%	87.0	%	84.4	%	81.5	%	81.9	%	80.5	%	90.3	%



AVERAGE IN-PLACE CONTRACTUAL INCREASES ²
	MULTI-TENANT				SINGLE-TENANT				TOTAL
	% INCREASE		% OF BASE RENT		% INCREASE		% OF BASE RENT		% INCREASE		% OF BASE RENT
Annual increase
CPI	2.84	%	2.13	%	2.58	%	53.71	%	2.63	%	9.21	%
Fixed	3.01	%	93.15	%	2.73	%	16.51	%	3.01	%	82.62	%
Non-annual increase (annualized)
CPI	1.67	%	0.47	%	0.50	%	2.63	%	1.12	%	0.77	%
Fixed	1.31	%	2.92	%	2.25	%	27.15	%	1.87	%	6.25	%
No increase
Term > 1 year	—	%	1.33	%	—	%	—	%	—	%	1.15	%
Total ²	2.91	%	100.00	%	2.46	%	100.00	%	2.85	%	100.00	%



TYPE AND OWNERSHIP STRUCTURE (% OF SQUARE FEET)
	MULTI-TENANT		SINGLE-TENANT		TOTAL
Tenant type
Hospital	48.7	%	83.0	%	52.5	%
Physician and other	51.3	%	17.0	%	47.5	%

Lease structure
Gross	13.6	%	—	%	12.1	%
Modified gross	28.7	%	—	%	25.5	%
Net	57.7	%	—	%	51.3	%
Absolute net ³	—	%	100.0	%	11.1	%

Ownership type
Ground lease	63.1	%	10.1	%	57.8	%
Fee simple	36.9	%	89.9	%	42.2	%


1	Excludes recently acquired or disposed properties, construction in progress, land held for development, corporate property, reposition properties and assets classified as held for sale.


2	Excludes leases with terms of one year or less.


3	Tenant is typically responsible for operating expenses and capital obligations.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 21

Same Store Performance ¹

DOLLARS IN THOUSANDS, EXCEPT PER SQUARE FOOT DATA




	2019		1Q 2019		4Q 2018		3Q 2018		2Q 2018		2018		1Q 2018		4Q 2017		3Q 2017		2Q 2017
Multi-tenant
Revenues	$352,504		$88,291		$88,542		$88,754		$86,917		$343,154		$85,987		$85,577		$86,354		$85,236
Expenses	142,140		35,186		35,512		36,591		34,851		139,850		35,195		34,636		35,818		34,201
Cash NOI	$210,364		$53,105		$53,030		$52,163		$52,066		$203,304		$50,792		$50,941		$50,536		$51,035
Revenue per occ SF ²	$34.84		$34.94		$34.94		$35.04		$34.34		$33.85		$33.96		$33.78		$34.03		$33.58
Margin	59.7	%	60.1	%	59.9	%	58.8	%	59.9	%	59.2	%	59.1	%	59.5	%	58.5	%	59.9	%
Average occupancy	88.5	%	88.4	%	88.7	%	88.6	%	88.6	%	88.7	%	88.6	%	88.6	%	88.8	%	88.8	%
Number of properties	150		150		150		150		150		150		150		150		150		150
Single-tenant
Revenues	$42,744		$10,730		$10,693		$10,696		$10,625		$41,750		$10,621		$10,607		$10,437		$10,085
Expenses	1,428		352		329		369		378		1,778		439		427		486		426
Cash NOI	$41,316		$10,378		$10,364		$10,327		$10,247		$39,972		$10,182		$10,180		$9,951		$9,659
Revenue per occ SF ²	$34.20		$34.28		$34.16		$34.17		$34.08		$33.64		$34.23		$34.19		$33.64		$32.51
Average occupancy	99.8	%	100.0	%	100.0	%	100.0	%	99.6	%	99.1	%	99.1	%	99.1	%	99.1	%	99.1	%
Number of properties	14		14		14		14		14		14		14		14		14		14
Total
Revenues	$395,248		$99,021		$99,235		$99,450		$97,542		$384,904		$96,608		$96,184		$96,791		$95,321
Expenses	143,568		35,538		35,841		36,960		35,229		141,628		35,634		35,063		36,304		34,627
Cash NOI	$251,680		$63,483		$63,394		$62,490		$62,313		$243,276		$60,974		$61,121		$60,487		$60,694
Revenue per occ SF ²	$34.77		$34.87		$34.86		$34.94		$34.31		$33.83		$33.99		$33.83		$33.99		$33.46
Margin	63.7	%	64.1	%	63.9	%	62.8	%	63.9	%	63.2	%	63.1	%	63.5	%	62.5	%	63.7	%
Average occupancy	89.6	%	89.6	%	89.8	%	89.8	%	89.6	%	89.7	%	89.6	%	89.7	%	89.8	%	89.8	%
Number of properties	164		164		164		164		164		164		164		164		164		164



SAME STORE GROWTH
	YEAR-OVER-YEAR
	2019		1Q 2019		4Q 2018		3Q 2018		2Q 2018
Multi-tenant
Revenue per occ SF ²	2.9	%	2.9	%	3.4	%	3.0	%	2.3	%
Avg occupancy (bps)	-20		-20		0		0		-30
Revenues	2.7	%	2.7	%	3.5	%	2.8	%	2.0	%
Expenses	1.6	%	0.0	%	2.5	%	2.2	%	1.9	%
Cash NOI	3.5	%	4.6	%	4.1	%	3.2	%	2.0	%
Single-tenant
Cash NOI	3.4	%	1.9	%	1.8	%	3.8	%	6.1	%
Total
Revenues	2.7	%	2.5	%	3.2	%	2.7	%	2.3	%
Cash NOI	3.5	%	4.1	%	3.7	%	3.3	%	2.7	%


1	Excludes recently acquired or disposed properties, development completions, construction in progress, land held for development, corporate property, reposition properties and assets classified as held for sale.


2	Revenue per occ SF is calculated by dividing revenue by the average of the occupied SF for the period provided. Quarterly revenue per occ SF is annualized.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 22

Reconciliation of NOI

DOLLARS IN THOUSANDS



BOTTOM UP RECONCILIATION
	1Q 2019			4Q 2018			3Q 2018			2Q 2018			1Q 2018			4Q 2017			3Q 2017			2Q 2017
Net income (loss)		$4,891			$16,314			$6,548			$37,729			$9,180			($37,151	)		$3,173			$25,224
Other income (expense)	13,564			2,850			12,135			(16,559		)	12,175			58,429			18,819			(1,808		)
General and administrative expense	8,510			8,534			8,504			8,373			9,101			8,272			8,021			8,005
Depreciation and amortization expense	42,662			42,437			42,061			40,130			39,573			37,324			35,873			34,823
Other expenses ¹	1,768			1,693			1,457			1,540			1,568			1,505			1,738			2,035
Straight-line rent expense	391			394			398			399			400			1,017			184			169
Straight-line rent revenue	(668		)	(682		)	(802		)	(1,074		)	(1,722		)	(1,205		)	(1,332		)	(1,783		)
Other revenue ²	(1,350		)	(1,409		)	(1,173		)	(1,268		)	(1,438		)	(1,258		)	(1,327		)	(1,196		)
Cash NOI		$69,768			$70,131			$69,128			$69,270			$68,837			$66,933			$65,149			$65,469
Acquisitions/development completions	(5,586		)	(5,376		)	(5,204		)	(4,417		)	(4,072		)	(1,949		)	(757		)	(167		)
Reposition	(257		)	(217		)	(368		)	(438		)	(525		)	(584		)	(661		)	(705		)
Dispositions/other	(442		)	(1,144		)	(1,066		)	(2,102		)	(3,266		)	(3,279		)	(3,244		)	(3,903		)
Same store cash NOI		$63,483			$63,394			$62,490			$62,313			$60,974			$61,121			$60,487			$60,694

TOP DOWN RECONCILIATION
	1Q 2019			4Q 2018			3Q 2018			2Q 2018			1Q 2018			4Q 2017			3Q 2017			2Q 2017
Property operating before rent concessions		$99,607			$99,877			$99,976			$97,185			$96,347			$92,209			$91,590			$89,395
Rent concessions	(625		)	(700		)	(609		)	(766		)	(1,053		)	(686		)	(655		)	(526		)
Property operating	98,982			99,177			99,367			96,419			95,294			91,523			90,935			88,869
Single-tenant net lease	11,046			11,290			11,283			12,073			13,213			13,078			12,811			12,732
Straight-line rent revenue	668			682			802			1,074			1,722			1,205			1,332			1,783
Rental income	110,696			111,149			111,452			109,566			110,229			105,806			105,078			103,384
Property lease guaranty income	128			187			168			146			175			182			168			153
Parking income	1,734			1,733			1,752			1,819			1,626			1,705			1,669			1,669
Exclude straight-line rent revenue	(668		)	(682		)	(802		)	(1,074		)	(1,722		)	(1,205		)	(1,332		)	(1,783		)
Exclude other non-cash revenue ³	(1,251		)	(1,309		)	(1,083		)	(1,165		)	(1,345		)	(1,201		)	(1,218		)	(1,085		)
Revenue	110,639			111,078			111,487			109,292			108,963			105,287			104,365			102,338
Property operating expense	(42,725		)	(42,815		)	(44,135		)	(41,737		)	(41,818		)	(40,590		)	(40,628		)	(38,184		)
Exclude non-cash expenses ⁴	1,854			1,868			1,776			1,715			1,692			2,236			1,412			1,315
Cash NOI		$69,768			$70,131			$69,128			$69,270			$68,837			$66,933			$65,149			$65,469
Acquisitions/development completions	(5,586		)	(5,376		)	(5,204		)	(4,417		)	(4,072		)	(1,949		)	(757		)	(167		)
Reposition	(257		)	(217		)	(368		)	(438		)	(525		)	(584		)	(661		)	(705		)
Dispositions/other	(442		)	(1,144		)	(1,066		)	(2,102		)	(3,266		)	(3,279		)	(3,244		)	(3,903		)
Same store cash NOI		$63,483			$63,394			$62,490			$62,313			$60,974			$61,121			$60,487			$60,694


1	Includes acquisition and development expense, bad debt, above and below market ground lease intangible amortization, and leasing commission amortization.


2	Includes management fee income, interest, above and below market lease intangible amortization, lease inducement amortization, lease terminations and tenant improvement overage amortization.


3	Includes above and below market lease intangibles, lease inducements, lease terminations and TI amortization.


4	Includes above and below market ground lease intangible amortization, leasing commission amortization, and ground lease straight-line rent.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 23

Reconciliations of NOI & EBITDA

DOLLARS IN THOUSANDS



RECONCILIATION OF TTM ENDED 3/31/2019 - CASH NOI
	2019		2018		% CHANGE
Same store cash NOI		$251,680		$243,276	3.5	%
Reposition	1,280		2,475		(48.3	%)
		$252,960		$245,751	2.9	%
Acquisitions/development completions	20,583		6,945		196.4	%
Dispositions/other	4,754		13,692		(65.3	%)
Cash NOI		$278,297		$266,388	4.5	%



RECONCILIATION OF EBITDA
	TTM			1Q 2019			4Q 2018			3Q 2018			2Q 2018
Net income		$65,482			$4,891			$16,314			$6,548			$37,729
Interest expense	53,723			13,588			13,602			13,464			13,069
Depreciation and amortization	167,290			42,662			42,437			42,061			40,130
EBITDA		$286,495			$61,141			$72,353			$62,073			$90,928
Other amortization expense ¹	8,468			2,191			2,170			2,089			2,018
Gain on sales of real estate properties	(41,680		)	(15		)	(10,787		)	(1,288		)	(29,590		)
EBITDAre ²		$253,283			$63,317			$63,736			$62,874			$63,356

EBITDA		$286,495			$61,141			$72,353			$62,073			$90,928
Acquisition and development expense	766			305			200			141			120
Gain on sales of real estate properties	(41,680		)	(15		)	(10,787		)	(1,288		)	(29,590		)
Debt Covenant EBITDA		$245,581			$61,431			$61,766			$60,926			$61,458
Other amortization expense	8,468			2,191			2,170			2,089			2,018
Timing impact ³	488			1,136			(349		)	(50		)	(249		)
Stock based compensation	10,438			2,639			2,601			2,605			2,593
Adjusted EBITDA		$264,975			$67,397			$66,188			$65,570			$65,820


1	Includes leasing commission amortization, above and below market lease intangible amortization, deferred financing costs amortization and the amortization of discounts and premiums on debt.


2	Earnings before interest, taxes, depreciation and amortization for real estate ("EBITDAre") is an operating performance measure adopted by NAREIT. NAREIT defines EBITDAre equal to “net income (computed in accordance with GAAP) plus interest expense, income tax expense, depreciation and amortization, impairments and minus gains on the disposition of depreciated property.”


3	Adjusted to reflect quarterly EBITDA from properties acquired or disposed in the quarter.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 24

Components of Net Asset Value

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA



CASH NOI BY PROPERTY TYPE
	1Q 2019
ASSET TYPE	SAME STORE ¹		ACQ./DEV. COMPLETIONS ²		REPOSITION ³		TIMING ADJUSTMENTS ⁴		ADJUSTED CASH NOI		ANNUALIZED ADJUSTED NOI		% OF ADJUSTED NOI
MOB/outpatient		$56,626		$5,243		$460		$1,062		$63,391		$253,564	89.8	%
Inpatient rehab	851		—		—		—		851		3,404		1.2	%
Inpatient surgical	4,768		—		—		—		4,768		19,072		6.8	%
Office	1,238		343		—		—		1,581		6,324		2.2	%
Total Cash NOI		$63,483		$5,586		$460		$1,062		$70,591		$282,364	100.0	%



DEVELOPMENT PROPERTIES
Land held for development		$24,647
Construction in progress	40,326
Unstabilized development ⁵	29,388
		$94,361

OTHER ASSETS
Assets held for sale ⁶		$10,005
Reposition properties (net book value) ³	8,836
Cash and other assets ⁷	61,372
		$80,213

DEBT
Unsecured credit facility		$260,000
Unsecured term loan	150,000
Senior notes	800,000
Mortgage notes payable	141,922
Other liabilities ⁸	70,076
		$1,421,998



TOTAL SHARES OUTSTANDING
As of April 26, 2019			129,214,135










IMPLIED CAP RATE
	STOCK PRICE		IMPLIED CAP RATE
As of 4/26/19		$30.82	5.53	%

1Q 2019 high		$32.80	5.27	%
1Q 2019 low		$27.69	5.99	%


1	See Same Store Performance schedule on page 23 for details on same store NOI.


2	Adjusted to reflect quarterly NOI from properties acquired or stabilized developments completed during the full eight quarter period that are not included in same store NOI. Stabilized developments include developments completed during the full eight quarter period that are not included in same store, but are 90% occupied or greater.

Reposition properties includes 12 properties which comprise 577,390 square feet. The NOI table above includes 7 of these properties comprising 348,237 square feet that have generated positive NOI totaling approximately $0.5 million. The remaining 5 properties, comprising 229,153 square feet, have generated negative NOI of approximately $0.2 million and are reflected at a net book value of $8.8 million in the other assets table above.


4	Timing adjustments related to current quarter acquisitions and the difference between leased and occupied square feet on previous re/developments.


5	Unstabilized development includes the gross book value of one property that was completed on June 30, 2017. The building is 42% leased and occupied as of March 31, 2019.


6	Assets held for sale includes two real estate properties that are excluded from same store NOI and reflect net book value.


7	Includes cash of $11.3 million and prepaid assets of $38.9 million that are expected to generate future cash or NOI and assets that are currently causing non-cash reductions to NOI. In addition, includes the Company's leased portion of its corporate headquarters of $11.2 million.


8	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 $61.8 million, security deposits of $7.2 million, and deferred operating expense reimbursements of $1.1 million.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 25

Components of Expected FFO

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA



SAME STORE RANGE OF EXPECTATIONS
	EXPECTED 2019				ACTUAL
	LOW		HIGH		YTD
TTM Average Occupancy
Multi-tenant	88.0	%	90.0	%	88.5	%
Single-tenant	99.0	%	100.0	%	99.8	%
TTM revenue per occupied square foot
Multi-tenant	$34.50		$35.50		$34.84
Single-tenant	$34.00		$34.50		$34.20
TTM Multi-tenant cash NOI margin	59.0	%	60.0	%	59.7	%
Multi-tenant cash leasing spreads	3.0	%	4.0	%	3.3	%
Multi-tenant lease retention rate	75.0	%	90.0	%	85.5	%
TTM cash NOI growth
Multi-tenant	2.8	%	3.3	%	3.5	%
Single-tenant	1.5	%	3.5	%	3.4	%
Total	2.5	%	3.3	%	3.5	%

ANNUAL RANGE OF EXPECTATIONS
	LOW		HIGH		YTD
Normalized G&A	$34,000		$35,000		$8,510
Straight-line rent, net ¹	500		1,500		270
Funding activity
Acquisitions	150,000		250,000		121,000
Dispositions	(75,000)		(125,000)		(12,573)
Re/development	30,000		50,000		7,281
1st generation TI and acq. cap. ex.	10,000		13,000		2,752
2nd generation TI	24,000		30,000		4,326
Leasing commissions paid	7,000		9,000		1,483
Capital expenditures	16,000		20,000		3,462
Cash yield
Acquisitions	5.1	%	5.8	%	5.3	%
Dispositions	6.0	%	7.5	%	6.2	%
Re/development (stabilized)	6.0	%	7.5	%	NA
Leverage (debt/cap)	30.0	%	35.0	%	33.8	%
Net debt to adjusted EBITDA	5.0x		5.5x		5.0x


1	This guidance range is based on current in-place leases. Straight-line rent, net was $2.7 million for the year ended December 31, 2018, with a quarterly range of $0.3 million to $1.3 million.




HEALTHCARE REALTY	1Q 2019 SUPPLEMENTAL INFORMATION 26

Healthcare Realty Trust 8-KHealthcare Realty Trust Reports Results for the First Quarter