HTA - Earnings call transcript Q1 2020 | Healthcare Realty Trust Incorporated

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Healthcare Trust of America First Quarter 2020 Earnings Conference Call. [Operator Instructions].

At this time, I'd like to turn the conference over to Caroline Chiodo, Senior Vice President, Acquisitions and Development. Please go ahead.

Caroline Chiodo

Thank you, and welcome to the Healthcare Trust of America's First Quarter 2020 Earnings Call. release financial earnings the yesterday our close. filed and supplement our after We be Investor on our documents found These can the with SEC. website the Relations or of section available being Please call XX webcast for replay and days. note, for is will this next the be

be questions the We our happy conclusion take remarks. to of your will at prepared

statements and course the current on of will information During based available call, the us. make forward-looking of management are we the statements. currently to These forward-looking beliefs

known and or actual risks, will results affected by are control Our and uncertainties our that ability unknown factors be trends, predict. beyond to

believe reasonable, from of future guarantees our current we Although our could results that assumptions our they are actual Therefore, performance. are expectations. not differ materially future

filings, section For the found a detailed our on of risks, description SEC can Investor which on potential Relations please our website. be to refer

turn I call and Scott CEO America. Peters, Healthcare to Chairman over Scott? Trust of will of now the

Scott Peters

for of XXXX today and us for thank morning, Trust Conference you Earnings Healthcare Good Quarter joining Call. First America's

Joining today me Financial is our Chief on Robert Officer. Milligan, the call

partners has discuss of of on like that our in our would our I significant outlook, the health acknowledge It one different to COVID-XX specifics we our care communities, pandemic employees. has the the our touched business had each and Before ways. and us impact

proud the and rallied circumstances am our health the employees to adapted events. care associated I to However, with our to be have provider tenants who and challenging meet

a perspective, very in position. HTA business sits From a strong

operating office a in the buildings United We throughout have leasing management portfolio high-quality key a great medical of property in and markets team, States.

X accounting of million square $X billion diversified for over more no across X.X%. feet. with tenant rent is for single and XX also XX% broad, accounted more almost portfolio with Our than It is market than no invested

in with tenants. from of providers, systems, health Our national markets, tenants XX% health rent and rent our comes from credit-rated universities our of care and our almost XX% care of coming care providers large primarily leading consist health

a over have maturities have is debt liquidity philosophy we last conservative, actions fortress over to EBITDA, next no We of taken due of direct a debt X XX long-term This leverage our coming the of X.Xx focused billion and almost $X management disciplined that the in balance months. result sheet, and years.

health look at and driven will as services today's are we resilient As among economic sectors we and environment, coming this need-based of the care that demand, out by the most be they period moves economy forward. believe

states have have have X access whose tenants place. their had our patients are the very they also issues Although and over not months, requirements seeing from away physicians disrupted Further, gone while last strong to demand increasing people in operations sheltered a in where reopenings. top in are are for as XX% And a almost of announced that elective X the scheduled over our priority have they states, return of tenants phase whereas many priority today, included of surgeries. uniformly is

down because leader worked with weather to space, liquidity limited that unique demands a and also do can this dividends we in our the to this recognizing are this confident assist majority the tenants in an unique the road. tenants can disruptions. pay with to As them during of time, storm We're vast able ability short-term meet with many this unprecedented our have

the just the amount Our deferrals as under XX% next rents. totals of April days. our collections scheduled discussion of of XX XX% were And today under of for rent rent

the path see upcoming short-term here, to normal currently increase especially be level to we flow operating return believe to to of million months. level cash we capacity approximately at a may very this as some tenants our from somewhat of this While manageable, disruptions $XX over

with are May for these collections consistent expectations. Our

We a future, tenants square quarter the could working we by can rent as as extensions both much achieve also are in anticipate for to we the today. deferrals, to our million signing second X achieve early goals as to result. providing XXX,XXX where addition with In feet we renew our scenarios free while

to teams surgeries. ready of many have management of are return are all property patients are in. who scheduling ensure patients out with also time work get Our tenants full-time In have working over our cases, to our our tenants and pushed and a they looking as to them to backlog they buildings

ensure working We teams for are traffic. building are currently prepared that maintenance to and hours our and with them we janitorial extend increased have

as disruption planning and As and especially we conservative viewed stability have relates of the a company, HTA. actions it as appropriate, taken market cash the prudent for to long-term

market better of overall stepped the marketplace. back temporarily from to have dynamics understand the the we acquisition First,

drawn cash reserving Second, the down evaluate we markets. facility, we have as on financial our credit

performance Despite March, portfolio was same-store track, our spreads. feet growth, on of in leasing, the retention re-leasing hold XX% signed X.X% by pandemic and of XXX,XXX quarter led new square X.X% first NOI taking

basis up sequential on Our XX points a occupancy rates were basis.

as As this focused forward, more we are practices remain new health flat in Existing is which have look care their tenants time, expect this simply maintaining our at for providers become portfolio to stay at to place environment. our on good in relatively we inclined occupancy moving retention.

still New done. getting leasing is

the is slowed expectations from it earlier and pace However, our year. in has challenging, the more

as As result impact of these actions. short-term pieces, pulling our we we full assess moving the a year are these guidance of earnings full

call numbers over greater now will through go to in Robert, the like to the would I detail. turn who

Robert Milligan

first quarter, laid briefly originally our Touching in our guidance. out Scott. performance Thanks, as was strong had our on we

more X% we by our same-store share driven and growth almost per point up X.X% normalized services margin in-house was FFO to and Our X.X%, $X.XX, under of growth our of rental growth platform. revenue as year-over-year brought increased X

quarter NOI. which for equated of million, was recurring the $XX.X XX% to Our capital

FAD our in ratio. resulting XX% increased for quarter $XX.X million, an result, payout the a to As

shape in is Our balance this pandemic. great we work sheet as through

billion, impact a equity end equity, in of the liquidity on million including the Including had raised of our As fourth $X.X pricing leverage we X.Xx. basis approximately of at only the $XX $XXX above per this total share. of quarter of we forward approximately the quarter, was

maturities, perspective, before obligation due near-term we of limited only From XXXX. very coming million revolver $X a our in June matures have cash

and We over capital million all $XXX our which also XX% complete redevelopments, average. of developments pre-leased to on have are only of required

continue to and our we leverage we operate in manner liquidity. finance business maintains to As and business a significant return will low making to continue that investments, our

given drew out responding quarter availability down the end, revolver while our experiences. to the did abundance the We Subsequent this the of remainder of of liquidity, we of were pandemic. ensure on $X financial billion markets an caution past to to

and quarter. of anticipate portion a at of However, by we borrowing given current trends end the repaying outlooks, do the least this

defensive in MOBs. to results rent significant inherent need-based now, April at the see coverage and we Looking continue demand the of normally

such Optum well our larger rent Healthcare. systems of and XX% are XX% of large with national coming as health XX% buildings Our from tenanted, or from from tenant tenants, tenants our Only our including rents capital. from health access of Over care XX% have with limited investment smaller are providers, more over profitable but to come who XX% grade. working local credit-rated, to tend be tenants extremely XX%

over normal this XX% of our For obligations. contractual collected rent month, monthly we

systems the to deferrals. treatments. physician primarily focused lower restrictions much practices, practices, have we surgeries on patient but also and rent grown volumes include from it from on hitting receiving first, tenants of for impact elective for health COVID came liquidity smaller who did our of requests At local As not-for-profit started begin investment-grade has their many our tenants' preparing

our we of have XX approximately XX% deferral next the days. rents of requests totaling over currently today, As

this as return our in see surgeries are tenants. the We especially patient and confident amount, volumes elective we of to

deferrals. taking From expenses accounting a the related an in we these onetime anticipate incur some quarter to approach second perspective, conservative and may

to confident in highly are anticipate the returning these to the over third we However, back be in rents ability quarter. or rate fourth run earnings paid time and for

I will back it now to turn Scott.

Scott Peters

Robert, open will we for Thank questions. you, and up

Operator

[Operator Instructions].

Markets. from today BMO of Capital question John Our Kim first will come

Piljung Kim

if clarify the could collected. how you your I you wondering just was of April rent definition calculated

million was got that there million for So paid? rent you that of instance, if $XXX due, was was $XX

Scott Peters

Yes. Rob, ahead. go

Robert Milligan

is way we as quarter. $XXX Robert. looked we revenue calculation about In little amount the a have total, of Yes. contractual total John, this was took at a is Yes, million we due. the that over this our

million month. compare to that's to we And million over month, our that a $XX total So which in little for collections the area about a the of was kind that. $XX

straightforward was a it pretty So calculation.

Piljung Kim

remarks, is associated the could if collected. mentioned was with what rent I wondering in you prepared and you the expenses there that amount. Robert, And some clarify onetime was your

Robert Milligan

as No, we're properties the little service a I think looking being at order about forward, keep think quarter onetime to higher. on-site there, open in certainly we're the our janitorial there's that keep when key I and certainly things going we elevated our I expenses, were expenses seeing in anticipate to talking we bit people think of

wasn't COVID necessarily for around of think higher pandemic. slightly is the if more expenses have I the certainly it that we wouldn't commentary

Piljung Kim

their X more XX some is provide you And patients pent-up final And physicians? for question. what back tenants coming deferred? just rent to payback you Can you the Okay. on up came to think with for that a have demand term then how month commentary

Scott Peters

Sure.

the tenants. been dedicated reaching of focus mostly the who this the time folks the to that we've has space. of the time extent, been of some the think long-term systems, pandemic, come us to it thing management our it's or there's senior health our out I XXX, people MOB and it's managers top time tenants. and our folks' local our the and, to who talked done to folks And to larger into leasing that's contacting senior care We've with with out management XXX some put tenants. space, to relationships most any had good been allowed both if property property leasing It's being senior

we've to move the They there that that's health will on, assisting hours. groups focused these with reengage to extended of the from is surgeries ready when we and that physician need they that systems, start getting the The health are been systems engineers on backlog. larger our is the they and and planning things one comments establish elective themselves And care infrastructure care our a forward. focused have

into comfortable the demand. will of one that I hospitals, some together. think in focus on things making patients we've the as of more is they've and put for conscious told the plans groups talked think and, understandable the of They're been effort I back receiving out. persist coming to They time aspect that the from from lot fact, treatments. have physician putting about, that They're completely elective a a reaching is which

the there. demand think is I

I that physicians, cognizant to recover just to very when patients relatively they think need the of the come I assets buildings the quickly. we, think health to when care that the maintaining the the level ourselves, they fact groups. it and in physician comfort will be need systems, come

Operator

question from of next come Joseph Nick today Our Citi. will

Nicholas Joseph

from in to actually that the deals, see you to given are back mentioned assets trading? back transaction market uncertainty. assuming You get need do stepping the would what But and there

Scott Peters

position. fortunate very a Well, in we're

what commitment about rent think what with think we now flow, something given cash talked we've with comfortable our I I see our are that's expectations with or we unforeseen.

experiencing. think, us that a position So others that be puts many not may I strong in, very

We that capital that forward can upon have we some in position draw place. put in a we equity, a

and the with thought have did latter what replicate pandemic, we were last capital the of looking So forward to we in year. be we moving that, before what we half was

right are the existed transactions ago that perception think days I ago. XX being XX or still or information now days predicated on

the going MOB up very well. space think I hold to is

is performance next that with sure with need that buy of committee correctly, only our is X, And is a to the priced asset years. over work but as not we thing the today team X to expectations making we on the that so the do be and something consistent also X, management that going that investment

That's, same. all -- the not are all days today Not going assets perform complicated than ago. XX was more I think, physician it to

are not pathology under to flows all same collectible. going being be think of I cash the consistent

consider market, lead I I our be So strong a good Is time it's It X team. in prospect, bought." acquisition stress. the is can it It's of for that it's days? road. think us, days? the our I acquisition we on It a will very just it to And X, business "Okay, we're job, receipts, falls basis. a upon, it acquisition. a some on that, be depend front good a market. will working and think, partner I to still sure our Is into something folks health care have us So based it evaluating XX from a there to portfolio, think, talking into not property XX our accretive upon, X, out the actively partners, opportunities our Caroline to be and done buying daily trying in with a making year falls is of what management. leasing our It down

days. here where the it's a XX, market next XX really over out is So to just process figure the

Nicholas Joseph

That's development redevelopment. very and just then helpful. maybe on And

for projects X about any months? the But mentioned do call over how it, committed the next underway. new You think spend you already XX starts, to

Scott Peters

We're, construction again, fortunate. place a capital with about in was think, $XXX that I million in We, we're place. of

when We have health their sat immediately we reached talked tenants -- we of space. we for that to projects with the taking back reconfirm X weeks systems care out X the the and ago, commitment

we July in coming our and example, schedule, with in For -- have on X time. on due WakeMed, that's Raleigh

continue. So with said to we're the They going us occupancy course, that the pre-leased. our all physicians. had therefore, was came They wanted continue. to demand. had they and the we, And want X They to and continue because development of it back opportunities had so,

we it's to through news. So And can because it that's the get continue done. us a positive process for this good frankly,

development, see. going new interesting On be to it's to

is I care health probably more going to systems. be think from focused redevelopment

As square is in to some we XXX,XXX extending we talked that's X be at us. with talked about. very that health for something to without systems. had feet Pi normally about, cases, would beneficial turn talked we've And about million commissions, different -- which dollars And have extended care

and we're next, to X time look in to I that on the So months. I it's capital strategic think over think, going how particular very be this at goes utilize best

is They health XX, a figure with the deal in to, year what very we've are days. to to overwhelmed. to with trying or think a trying care that. would as years. them to through to capacity get systems I there their you we do are have format, lot XX out be And to we They're are X next receptive that business expect, want XX, of working how good and the talked

be disciplined to will again, entertaining on very, capital. very decisions we want we But So opportunities. make

Operator

from Siversky come of Our next will Berenberg. question Connor today

Connor Siversky

your question in do MSAs And any how markets you Quick in look there follow-on to current Nick's earlier terms of environment? the would current I are at just mean your markets. target at looking would future stage, to that positioning can be to the Any attractive higher you how income? lower perhaps median provide at seem this appreciated. unemployment market as due particularly in or relative color you're then

Scott Peters

at particular term a rent as Well, our as said, And tenants. I really at pretty we've diligent, And our had We gone conversation, like exhausting, we've I has with through case-by-case. looked mean, we every a one-on-one markets. as process conversation been looking or our extension far concentrated markets. much deferment

of our that we period the think going relationships I the have is the to the portfolio where to performance that perform the that established rest uncertainty and extremely going that over you're is -- of at and market do seeing of we're this year. certainly well we've from size for this indicate depth the

market is a So and team at. I from I'm perspective, happy, we're think our where happy very management with very

until have those you add, or credit the you the we're from this difficult And never have numbers we've of reported, about really prospects times test perspective. of certainly, And When assets, to markets to like in health appropriate acquire with continue never that most be be earmarked frankly, with will those will credit that's as markets care we'd time the It been And stress It frankly. I be performed. a because in. the optimistic really very credit systems. difficulty. think, expand it we and will we

Connor Siversky

wrong GCs sourcing, Or that but any like then development equipment in on running into And here, if would mean there projects the are still surface, delays pipeline, I it suggest have process. any are issues, me supplies? correct and I'm the these commentary seems in development? your Okay. on been

Scott Peters

X last we X another to continued X of most except in X, we've, continued forward. to we've we've weeks, or move development markets, No. construction, over where, our the TIs, have have have instance to that continued is This to have

not perspective. So a been it any scheduling from construction we or perspective, yet notified from a have a perspective difficulties whether supply be of

Connor Siversky

on about progressing lease me one leasable first XXXX of expiring It you I the how last like quarter. the mean, conversations And in are remainder? looks Okay. for with area XX% the expirations. covered

Scott Peters

about talk to want that? you do Robert,

Robert Milligan

Yes.

we in are. kind from were of a could for as When to new had expectations this into coming think, do of certainly Scott in outlined they're stay where I want from interest tenants I think lot the very seeing as certainly time have we be. place, what not I to we think know year, of providers the a the they think certainly, we're commentary, focus be And want I earlier how and some when the COVID where leasing perspective. high we where to they pandemic come we hit, is back I they stay of are moving think, do and going around, to patients most tenants been now

So right have are now I think been the conversations very, we're very -- having good.

is XX% optimistic -- the be retention the certainly started probably so the to think rest we than plus were year when that more And a of range, on our our year. expectation for I level the bit we little for in type

Scott Peters

in now than X we've high leases seeing want extensions. that on working we're the even retention Again, the a we people seeing that would uncertainty, uncertainty. next we I yet. on response lease and or this had months tenants to started we're with today. person the better have out X we probably We've And certainty years in the later some have had based who in favorable frankly, I had folks to regards XXXX, more much fact retention seen hasn't have due, that extensions world that conversation would OPs XXXX, would about reached add and ago of we've leases And coming a all that, even extension to and say, right that them said would the past, been uncertainty there's in just expires in certain with to certain

Operator

come today Street Lukas will of Hartwich from question next Advisors. Green Our

Lukas Hartwich

The of under language press may release dividend like in makes some provide thoughts updated the review. it Can sound kind there? be just you the

Scott Peters

of answer, closer more Board of our were that that to standard evaluate visibility can at answer, is looked dividend it investment specifically to all is our out and the course, move on earnings committee. present by the to the our is always by the of Given make business our they and our for the that release, we a so something aspects compatible a quarter-to-quarter dividend time. basis The move -- simply

the amounts from see you liquidity about from we and about that As we've perspective that. we very are a where perspective, rent can collection that a today talked feel good

move it so a aligned. announcing getting been couple of more an our the dividend of past was more And time. had of a We simply ahead of months by something outlier kind in

And to good this a so is REITs. more opportunity from line something a among put basis in most just consistency

Lukas Hartwich

today. Great. rent deferrals. of rent with conversation really And provided are disclosure helpful you on I'm curious then tenants just some part if abatements the

Scott Peters

-- going positive. that is we discussions, has fear three that of a were ago case. types XX% biggest have both discussions been I that be That have this unreasonable to greatest my my from would and the there be what have not calendar And X to from been there's I the is weeks the from -- landlord. objective Well, and tenant I said, that's goodness, that's going something and had would of say folks or extremely was complete a that --

rent, said, months, X have have need different. been or who pay X as next talked folks most And we the just talk to fact, it XX% month, we it's we'll of it's need fact, we to I months. in wanted to the X asked what over back been and about in in cases, have, We XX%, XX who

it's think reasonable. to simple I it a we had there's work be we do about rational. abatement. to paid be be frankly, want to there We be abatement where couple, win-win is to back. want and discussions don't going rent There's with But We situation. discussions, folks few in to to want and not who want a have needs we that What a always haven't we mean, just,

systems And is and most most want to they to of in of of want the to health they business. have and and they want the the tenants care The back ongoing stay, get businesses. good recover news place that most their physicians

we lot that? we the now, do conversation the more about work about conversation how we buildings. who so hours, do keep sure to and And make buildings you sure do feel are patients together? the a is extend the we How And when can make working how open, the right is that do how do is that janitorial get they we want comfortable returning the to to

is now. that the so the And majority conversation of

Lukas Hartwich

environment Great. larger last you me. accelerate independent for the trends systems current of then will health the Do one consolidating think smaller And practices?

Scott Peters

that I with or imagine I and to if small are a X, talked And practice. a Number much goes couple at physician process back the mean, they perspective. and think the able this comes can care have PP&E better XX And next prepared health we will coming through had this being we've things being work what they of or from country think think -- months, and about one, from the the Well, staying systems the I conversation And physician, not being always that do if you X X be being do. physicians for to XX, that. not that very out I frustrated. able offices, small of X and home

care the doesn't something governors that continues. and the can that something on is home. health it think at recognize that stay and not be put hold I states It's

perhaps the The do how access perspective, out. looking physician is are going be news news. health what think plays so they from good think pandemic of a able I they to good more and that's I we And the an have system impact regardless forward, productively less are, that, to of care

that. move working tenants with So is and that looking forward. I that's about think happy we're -- we're them having we're those how And looking at

Operator

come Anderson of question next will Our SMBC. from Rich

Richard Anderson

everyone hope and I over team Well, doing is okay there.

Scott Peters

I guess quarantined. hot Well, it's Phoenix. harder we It's you're are. very in when

Richard Anderson

Dry heat, though.

month asked back very anything at a the get through like was beginning month It John the A a the sounds that just but to in concern April XX% typical that that month. here. question shroud that I of typical. was month want of of So to entirety

April maybe sort presumption payment wanted that or particularly approach a to you of the rent curious, is and deferral Is me in into answer plan, was then for that that is $XX to in and did no, of a And approach you of just your of million the million of starting this. switch way So talk if about kind say, just May just done you I'm of kind that read kind we'll flip in kind dig deferral includes so there kind that curious, like to switch the it? the look, to instead dimmer kind high. your pay got plans it, of tenants anything to I'm of all of $XX April?

Scott Peters

calls we the know think were expect. looking any is able or internally, best. wasn't $XX or sure have million, Robert really -- The until other leases that were we I started seeing and to way beginning for to opportunities, the talk reaching who something management to you we they for and out out, were seeing had other or to team, started reaching we our Amanda going daily mean, frankly, I forward. going for see. any to were we to we we until Well, reaching deferment weren't $XX where at, Board didn't talking the people than and folks, didn't contribute of actually or are, I which course, million receipts, that we were mean But folks we much Rich, really extend the surprised. to what of we to as I of would track, what hoping if said the April, at out in of it

have expectations, May, track we we think track and with on I that as stated, is daily. May our

that that for positive a something is very is, so And again, us. strong

So it. and extension and trying from open make any fact, days X "Would discussion called or about deals to said, a good." Robert reached it. I don't We was perspective. for that funds us you So X whatsoever right our stand way that we're term?" the out we fact, and a to a out who fluid from that's later, Rich. "Look, And have where good. or But sit from really but We're people payment that know or deferment back the now. we We've need in something had, we don't we be other appreciate they've an either a don't it said, sources, in to And need have of us, been conversation. government is We've got and process, called in

seen an how I far. day every we interesting to up, want it's day. wake Robert, anything? that's think But add so we've it And you do

Robert Milligan

Yes.

kind expectations typical from Just from a of numbers perspective. adjusted

-- call our either certainly, the are XX% think, I that in total. approved it, deferrals outlook with, we've or discussion in

I PPP the get payments the a thing think for then I into July. and no, from the them other think slower that one number our of physician outlook range May, is month, the of color and funded that we'll have XX% actually we collection, But of much in XX% a was collection, June saw just somewhere program. level local start certainly perspective is to through

And commentary. they deferrals of of kind pushing any out, up so to Scott's discussions ended

discussions some the So think to really have lot -- physicians I line month was it do very put of it's of next sight kind and okay, these I've on if got And the for from that, things to, hold. into have certainly of while with throughout flow of did now typical, PPP and cash timing of looks of bit the like see the local I deferral months. we a the flipping those funding two surgeries a the funding a can different. elective number conversations some to payments little after But starting that,

So...

Richard Anderson

right. All Okay.

this So see goes the be might in or that something from month month there. equivalent how range number for like it next and XX%

Robert Milligan

and the right. our deferrals That's Yes, given expectation whatnot. that's

Scott Peters

things through Rich. gone it we've change. And And in again, detail,

predict time future. can't we've -- to the You this. But taken the through just go

Richard Anderson

Yes, sure.

Okay.

So question over the days. number two, you next use this XX language

that was you, million it XX% dollar the XX%. maybe said I that maybe the $XX next -- think Is Scott, Robert, you, that XX days? is or Robert, the was over of said it value the

Robert Milligan

Again, $XXX have Yes, given we any million of $XXX $XXX revenue that's about million, on million, right. quarter.

And so that is that of in $XX million of XX% kind range.

Richard Anderson

okay. okay, Okay,

$XX that's you. million month. per So Got

Robert Milligan

not million $XX per in month. No, no, That's total. Yes.

when we back at specific this you feel they for had them, then So track with getting and good a for about we'll discussions, "Hey, paying. we're two months." looking do And we've say, of as say, tenants, number on it,

totality in that. trying we've we're the of capture So to what granted

Richard Anderson

surprise the maybe to been a of discussions. the understand now the of coming Any sort surprised, Okay. the tenancies Is part REITs a of involvement I you? All those that but off of deferrals. this right. health comment into a And that groups, information. I bit process on physician shouldn't be, can reported I'm that? bit Other have of also of haven't systems as

Scott Peters

This paid. committee. And an we back back with We ago. got ago We XX% issue weeks Yes. XX% We or responsive. of about investment have, be rated three -- talked sat and when then not with And was our started about wanted it our talked talked weeks, as we to Robert of is pointed investment-grade weeks tenants. Board, internally. getting five rents we out, we our four was

underneath then was business X%. would I think is that wanted very a time confident. paid, we they were discussion they one basically could months just don't to again, a of we their will if And demanded I perspective. short take and feet us, And that something only they would they pay we very with. We have something confident they do them, get the is if this get a us. good them think This that's and something, feel was feel to and couple have help and and paid if it

this the is we could the enterprise shareholders. our long opportunity largest was MOBs for generate for HTA term. owner where an And us is this -- enhanced for value in of

the And an I the I dividends major it rewards. players systems will think think reap think will health to with infrastructure with will to so are health it going key know did. good shareholders and decision going And perspective, the those These forward. win-win health something in was care a They business from And I it pay deal make tremendous we future, in the I be going to in that, for care are be us care. folks. players easier

of that's when -- and folks. of to we business out we reached philosophy that So sort the took

Richard Anderson

abatements. cash situation, But relationship How kind write-offs up thing how of noncash bad know Robert, you. course, of and curious become this as last of terms could Good a it's your debt was I'm there about of think in the further collectibility, a for situation makes much the Okay. out, when whether sense. antenna's a total or a here of I process. rent question, about part bad maybe goes you debt? then much there chitchat management, And little

Robert Milligan

and bad offices physician review there the an And certain debt pay whatnot. monthly in tenants certainly, patients in underlying Well, a our I be this surgeries elective think the from to all much an overall collectibility given very are tenants. we From collectible, this whatnot of return are on going perspective, anticipate the especially point, deferrals and that basis scenario, kind us. at we certainly with don't of

and And So we normal that's thing. on take quarterly bad basis. debt just a regular a

I we policy reserve an quarter we perspective, always shift accounting what the of outstanding. certainly in from very going think I second forward, and conservative have think we what our we're to and as view

But from at... environment it's heightened we think, or tell. is get appropriate look something economically to too about anything conservative it's a amount I But look into that I a taking an be will us the certainly just reserve for there And take like think as I if you it think perspective, I we we we'll approach So a it. certainly is an amount take bit conservative so that, think we a at going What's volatile, early to what on a of charge this? as little do? from sensitivity more that's be do

Scott Peters

Consistent with...

Robert Milligan

we do And expect that. everybody else to

Scott Peters

a that, that's And personal part deferment. case-by-case Rich, basis, is collateral both equation. This for guarantee, we've a even win-win I would process looked or as two-sided or a also, say, of we've short a as but we've short as of on on not the physician through we've us. of this If been side, the tried on been we've we've small gone part at tried,

we upgrade increase the consider collateral So to our to what where I through or opportunity have would appropriate. taken be to also

or just look and we've rent taking collect. not at a not deferred so ability And underlying to that arbitrarily

Operator

of Todd Fargo. from Stender Wells will Our next question come

Todd Stender

I hope you okay. guys are

Scott Peters

hope We are, and you are, too.

Todd Stender

All right.

but will right I are so least the line expenses. doctors going sense top that looks a They term, probably of So of over can look if with okay, they like see longer. operating don't just what to how sense near at retention maybe now But backlog the their be not new surgeries, would high reopen. I elective and procedures a tenant imagine operating have have protocols maybe their with as

guys and are how escalators, So determine, you just groups rates over term. least rental physician and as determine, and confident they guys seeing near at the you annual

Scott Peters

with deal let's the one Well, first. Right. last

we're the that X the getting hasn't expectation I think escalators extensions anything to and there's the putting signing, at with the that been still don't had we're the weeks we're we've consistent leasing rent place, last prior looked X%. the the new With in that that with we over pandemic.

would leasing underwriting, So a or whatever with, the or we before where perspective, that consistent from were as be we're both the to of both may rent the now, I situation say free from after. TI

I think process. be there's that an evaluation to going

kind something just that's I additional not to would unrealistic be space say, normal of of have What just think doesn't do do severe Is need? there kind have expect best okay, process a I this look happened it that And everyone that expenses? how of and this. I operate?

I some much are be or groups more new that physician coming space to forth. quite as patients be in need the the requirements it's need comfortable with or need so it might going want with office. spacing think see the situations new a making sure to I -- It don't to, or interesting space that with or expand little into might

to think try from and frankly, is assets to just we to plays do do need of however our it we'll going how I process to next to go can And year, that, the of see out. best rest that -- adapt course, So the forward the this over a perspective. leasing

Todd Stender

And just with but maybe, with I'd to comments. and if Robert Scott, certainly right usually, That's have helpful. start you any this, go Robert

you're little You've this to drawn? going think more for And table? one. taking signs But to That's do keeping line the the how move some what to off in you budget entire credit. of long cautionary comfortable see that do fully you tapped need maybe a that be in of

Scott Peters

Well, Todd, that's not fair for Robert.

So much get wanted -- grasp that, and my completely And just I'll see answer more given We wanted and now. where that. feel for our We we financial systems unexpected. the comfortable we were sure that the I'm unusual This This could should care the take full events a the and to and we are that what since markets stable do. to make fourth looking experience at. rents is we one were. health our will probably Scott, that responsibility on were is

were we very term the make took So we action position. we were going cautious. felt -- to for We in best shareholders our them and put long was the that

forward, We pay Going our receipts. we've with comfortable feel it to already started back rent very down.

it paid So that see should you'll where as get to here, forward be. down move we

Operator

come will question of Mike next from JPMorgan. Our Mueller

Michael Mueller

Will of for rents are stripped your that you line sup. treatment FAD count they thinking about Robert, deferred put I the in be was in that you item? curious How the definition? of the out exception it's situation? in different you bit of bring you time a this it to cash an of a Or to closer do the spirit because make kind

Robert Milligan

through over going we certainly as the go Mike, that to I a conversation work think be that's next we quarter.

had of which kind definition, or since like public for even capital anything incorporate we standard -- doesn't our think working fluctuations we place any quarter-by-quarter. we've do though that, have considerations some in I went

have we'll think I clean with REIT it's discussions as that's a consensus becomes give but community. there answer that can't So in going I on yet. to that the definition, have something our standard a that throughout not we're -- you It's certainly something

Operator

Our Daniel from come next will Bernstein of Capital One. question

Daniel Bernstein

off Again, in seems a properties? little everybody just I difference I a off-campus of better. more properties performance towards a change little so. and in light It hope my question bit I and guess off-campus you on-campus affiliated, is, and is of between some, guess, seen and have well. bit on, in performance especially maybe understand trying portfolio the to nonaffiliated difference So a between in maybe your non-affiliated

Scott Peters

Well, care health think assets I portfolio. place in still have both the tremendous a

ability I situations. think of off-campus things this immediately even know hospital. and several -- think or forward, systems the going to a do had be health very of care on-campus systems health were on call really community I patients to stronger because concerned different going they on-campus the what an is talked the that's the to core, service given patients were care I we've format to coming all we MOBs from were they actually to perspective, under

that's health the care, situations evaluate. unfolds, to I situations, like But impacted, community effective in this, of ours, some some part in more it so going how of going core And to is our be health health was I think locations. care served think access frankly, in be on-campus think on-campus the access to during But locations. the than that our be care going systems going both cities something it's system I for forward that

Daniel Bernstein

about are Is other asking groups question physician -- based really surgeries trying for Okay. I they the had already scheduling or just guess, just about pent-up that your elective demand? hospitals or upon the being for surgeries to I -- already And are there's hours. that then, assumption talked I'm understand you scheduled. their extended if

Scott Peters

few that the the folks to process in that of schedule starting they're located now Well, we've surgeries. Because open. to, is elective talked many in, are the we states

months. the for the or we So to hours there X was for we're actually planning actually an hours in conversations X need extended evening X extra because X open next be about to

I revenue mean that on. quickly can. as So as want they're much focused to something as it service patients their they is they

So they are what trying being to receptive that's to that. we're and do, certainly

Daniel Bernstein

go about to or extra been chatter concern the there's thinking are that and themselves changes requires Okay. the back Maybe just take But people physicians it some like surgeries. have Well, actually the going they're pent-up hour. some that behavior. demand in sounds

really that's So interesting.

Scott Peters

Yes. as And I it's before. think we talked blend a

fear that or overcome I from come make job try surgeries going to that can. their as recognize you just that trying to sure that those fear they about so think as they those the patients they about. of elective they're back talked soon And

Daniel Bernstein

heard telehealth is isn't MOB is from investors. that again, threat not it to complementary. Okay. the you're much to I guess the that looking Is telehealth? I've I MOBs. as to a is think that right see way Or that threat my demand? concern view of at something as just a But a about

Scott Peters

Yes.

I has steps a forward. of think taken telehealth couple

adapted replaces that they they've they can. the anytime and think as I given MOBs. it utilize think don't I situation telehealth like this, have people a best

the is that more think fact, In things, as I you form folks always get as then the we've what more will care hope, -- need, way go get that I they think person don't health care a significant. be sense access whatever to lead the is. it's back would getting to because the them seeing of can that's to about which only someone's to in then said, that they physicians I to condition talked in going truly

see care going health progress, I we it into think and just a forward. So I as it's the think flows it system

Operator

Our next will Stanley. today Malhotra question Vikram come of from Morgan

Vikram Malhotra

specific if like specialties call I the deferrals care? can out? meaning particular by concentration specialty, you primary missed Sorry Or but any in any this,

Scott Peters

want you do that? answer to Robert,

Robert Milligan

Yes. really seen we specialty by specific per se. haven't We anything didn't --

split think systems looked most focused we've a on part. investment-grade, the -- I XX-XX actually not-for-profit patients. and that physician health of them COVID like been certainly local to see Many spending interesting of actually on health are about practices it's systems board, the a across deferrals that. it's the as capital for between lot probably of They're been treating things

as partners, at and looked And from a did. looked timing us we to it so which perspective

looked to we we one out, stick that already for with surgeries. on that think -- And work Certainly, the underlying physician again, the don't the did They're us side, I anything But them. centers they're asked profitability. think were local at rescheduling I surgery specific. saw

I been specialty creditworthiness about kind that. the been there's mix think from board. don't anything good But the specialists we've It's across and of we felt primary So seen. pretty care of a perspective that a of

Vikram Malhotra

any this, anything -- segment -- missed know to cap right pricing just tough But in where kind then sort anecdotally, And or it's just for you've seen values -- just us per foot or if I are I MOBs? or sense shaking you maybe per a I'm are I you Okay. on sort But has haven't out if anything of now, foot again, rates apologize. cap of of where rates trending. that heard you can of give understand you've think curious

Scott Peters

of an would for opportunities perspective would little will there's able cap that that very a there really be substantiated haven't the still we rates heard rate a any folks say into will equation side that points that is better buying and pre-March. And I particular you be lot what seen we've to in what a the in some we've would heard, of at gotten cap are and needs get But very, have data rate we'll cap my in appropriate acquisition, this disciplined some Well, we haven't be I relationship that industry at the it. use. than view that were the goes that that to to at folks the And in from MOB be utilized point normally expect to be time, pre-March. capital

comes think try a decision-making we're I is part patients and prudent this value. what So going to long-term where to that's into do. And

each looks our know, investment committee our positions. at you of one as And

And around. But shareholders if to something So valuation -- a now, get fortunate in. And returns, if standpoint. it's term, that's point going probably a do accretive looking evaluate process we to it's long that we're or still to right see that be that. we're we're very we that's have from strong we're something able a discipline active we

Operator

at will conclude over question-and-answer gentlemen, time, session. this Scott our the closing and I'd to back we Ladies remarks. Peters conference to for turn like

Scott Peters

we've talking like that update to and or look and talked anything the we And thoughts everyone on our to the arises about. the everyone being changes of call. and certainly I'd questions Well, that next market earnings thank processes that to for for everyone at on we any call, will forward you

you. thank So

Operator

now We and attending your The conference for may presentation, disconnect you you has now today's concluded. thank lines.

Healthcare Realty Trust (HR) 6 May 202020 Q1 Earnings call transcript