HR - Earnings call 4 2023 | Healthcare Realty Trust Incorporated

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Operator

Good morning or good afternoon, and welcome to the Healthcare Realty Trust Fourth Quarter Earnings Conference Call. My name is Adam, and I will be your operator for today. [Operator Instructions]

I will now hand the floor to Ron Hubbard, Vice President of Investor Relations, to begin. Sir Ron, please go ahead when you are ready.

Ronald Hubbard

us Call. Healthcare joining XXXX Fourth for Conference Earnings you today Realty's for Quarter Thank

on call me Rob Joining the Hull. Douglas; Meredith; and Kris today are Todd

matters historical A statements forward-looking the company's SEC more estimates, uncertainties. XXXX. company's contained forward-looking the for with specifically that and involve to this the risks for risks reminder of within, may of except These that judgment statements filed the ended obligation Form These discussed XX, assumptions, contain the discussed in call The the information XX-K are December material. call. the forward-looking represent as any company date this year in disclaims this update

operations, in measures the also FAD, ended reconciliation found December of FFO call may FFO, quarter XX-K press and to discussed per The financial company's per measures contain share, matters XX, the the in release, these A normalized measures GAAP XXXX. income, funds operating most this adjusted on or FFO, funds and website. company's company's distribution, may or EBITDA. available for FFO press for are normalized non-GAAP Form information, The EBITDA from NOI, share, net certain the earnings such be earnings release supplemental financial available as comparable

the turn to now call I'll Todd. over

Todd Meredith

Ron, thank morning. you, and you, Thank everyone, this for us joining

half exceeding guidance for our several key in for on with upper of of share growth quarter meeting metrics. expectations in per quarter the range. fourth year Healthcare the or Realty was results our was Same-store solid generated FFO $X.XX steady the expectations. quarterly and line Normalized and

and multi-tenant with fourth the growth, outlining recall, we will published You starting quarter, bridge last NOI our for expectations occupancy a quarter.

for at over the multi-tenant points focus and report end the high above our to X.X% the properties operations range expected store. XX quarter leasing our were incredible same the absorption basis and to pleased top These multi-tenant efforts properties, NOI and teams. accelerated end for results are growth range of achieved very our positive fourth strong through of of of all not just We

Looking where areas of forward, can we see keep a improving. couple we

property in upper tenant the momentum. that expenses. more retention. reduce over the level most in to properties came higher What's made lower achieving to retention significant third XX% fourth see progress with First, than and at in at to we our excited than is due second XX%. A in goals. What quarter. lower We for end compared us was ability operating quarter incremental the help legacy fourth retention retention our to the the leasing part growth. is We improvement of reach portfolio. XX% The line the retention in better HR is taxes. push to opportunity more expected HTA see And higher XXXX. Together, That's opportunity 'XX on about the quarter over new will to in I'm X% just X% expenses growth expense just

pace Our marks over XXX,XXX of square feet. the occupancy XXXX. the new our consecutive leases gains X leasing signed and square strong in team leases quarters forecast for averaging fuels feet This The fourth new what XXX,XXX bridge is signed totaling in quarter.

were costs XXXX. fewer an X% down occupancy point, tightened, comes this momentum from of this, What 'XX today over about the in annual gains. were average X a you in illustrate recipe have broadly place more replacement favorable at replacement the Back for much versus square chasing more development top more putting Construction for around rents yields it in to $XX development of X%. a costs at escalated are replacement backdrop has On have equivalent which XXXX, systems our leasing an rents. square rents are That and financing tenants than and look is per costs $XX. square means MOB. To last look rents are what MOB a groups. $XXX will now higher costs both years physician growth, in approaching approaching foot rent later, years. Required uptick with drive this provides Five foot. independent foot, net around we are Couple at seeing and low yields like Xs, we and demand supply typical much $XXX a higher As Dallas. a steadily health MOB

in existing than up XX% buildings. rate limits us more XX% replacement This in follow. and on to have X we're rates improve Healthcare Realty, maximizing years annually. in gains At and sets occupancy laser-focused increased rents So more with new acceleration than supply to or occupancy 'XX

and Now it financial I'll turn our for Kris? operational of an Kris overview results. over to

J. Douglas

Todd. Thanks,

were was It This a normalized than from the was used million third a was interest $X.X sales expense per dollars with of $X.XX. $X.X reduction quarter million that from solid million in line. in result of repay $X.X offset fourth were the FFO share sequential FFO The to NOI asset dispositions. a the quarter. by reduction higher improvement

the ways: $X.X of in repeat in growth contributed utilities operating The Approximately in and was and quarter. taxes from the will net quarter $X.X X.X% was X.X% operating property also the not from periods NOI point quarter successful Revenue of second year Cash driven lower improvement well portfolio as the X.X%, basis XX quarter The as The escalators HTA primarily fundamentals for lower lower average averaging per higher operating in was and since Texas. growth down escalators spreads improved X.X% that X.X% future of was This same-store third for was by leases, expiring which expenses property of last was a Year-over-year basis and recoveries square X.XX%. in quarter tax points up growth occupancy. was The to averaged reduction revenue was were up the lower the This first, seasonal revenue first rates, expenses. Operating quarters. driven from quarter. from X.X%. We XXXX. related total is new leasing which of in XX-basis Same-store quarterly points X.XX%. X% averaged were in renewal million a benefit especially in third of and legacy to escalators increase above prior for sequentially. expense improved. Additionally, the quarter foot taxes with result appeals million rent expenses XX the property of in-place down ended X was especially taxes. X.X%. occupied the well reversal leases, improvement

XX,XXX The average This more over the maintenance strong the increased basis properties of The NOI subtraction. points square by occupancy in year to in rest CapEx XXX,XXX multi-tenant feet contributed XXX% was or was maintenance significantly addition XXXX range the increased $XXX million. total to sequentially. was below portfolio of feet of sold during occupancy leasing guidance X.X%, increase escalator portfolio. Sequential square XX our same-store volumes for of ratio Even middle year. impressive, XX.X%. the the for or was an the was year. The CapEx. payout XX% Total FAD for Second

payout anticipated elevated we With is the the invest remain to in in absorption as likely ratio strong XXXX, build-outs. tenant

comfortable debt year-end the in X.Xx, credit positive from of down line ratio the are NOI within $XXX the quarter. at to at we was XX realize EBITDA fully debt was fully asset range. our the was sales as We back Net absorption. Net target repaid come as from December adjusted lower million payout the will of

as $X.XX first $X.XX $X.XX guidance share Looking per outlined supplemental for XXXX the are for rate from run FFO annualized of $X.XX To we and for assumptions X The the is major fourth to and to property quarter the share. provide on the FFO ahead, items of $X.XX adjusted appeals. drivers context released such this forward quarter. Guidance Page morning. an guidance, run tax the rate we normalized out-of-period major walk per for

growth in vacated X.X% projected be office January. and parcel. Denver. government sits in Multi-tenant generate and $XX XXX because Hospital tenant to the in this A plus absorption escalators the or minus St. XXXX end in internal Anthony plan in projected we of release When XXXX, of is general front be of X%, was building cash building the is to door million million is raze The NOI. growth X redevelop at of property the major the to $XX CommonSpirit purchased to of services below points expirations. XXX the be The cash which driver Single-tenant in-place growth to operations. will basis NOI

We on are redevelopment the plans year. lease The property with expect this later the building hospital long-term expire the for the working at and will of to other January. demo end the

year-end. the marketing are building property We a with of selling the goal before

in We proceeds either XXXX so rent or have from be fronts on property upside. any progress would these any not projected new sale

million XXXX lower a increase midpoint. are the to related performance-based incentive creating compensation expenses primarily at to in rate projected to increase is comp. tough G&A is returning levels as materially $X.X run compensation The

interest the million quarter million the with $XXX new fixed In will for no that guidance. we cost expiration, in expired major The annually. X.XX%. acquisitions assumed X.XX% fourth is an a other more in of headwind January. rate interest swap a There swaps $X executed during The rate new swaps average rate are preparation at rate

million needs projecting during match capital $XXX million the $XXX We our to are to dispositions of year. fund

guidance NOI in and absorption is multi-tenant The introduced consistent last we our bridge quarter. occupancy with the

XXXX. more through included FFO shows growth help It sustained accelerating an positive strong generate NOI we bridge XXXX. occupancy XX that on will a occupancy on updated of in velocity This is discuss detail, into going absorption presentation. will our momentum Rob investor As exit expect drive Page and

turn will Rob now our over progress. leasing it to on I detail more for

Robert Hull

Thanks, Kris.

Healthcare Realty of leasing posted activity. another strong quarter

greater XXX,XXX New XX,XXX quarter that projection. signed feet leases than were feet square fourth square totaled our

Approximately these portfolio, came total half slightly signed For of multi-tenant the new team a deals over our year, million of legacy of feet. lease from XX% portfolio. for X.X which almost represents the square our XXX HTA

total In X.X renewals square the totaling were square that totaled addition, feet. million signed during million year feet the renewals quarter, X.X XXX for to XXX bringing

team equates momentum quarter. fourth tenacity. Strong team XXXX. job of feet is Amy year. commend extraordinary November culminated of an absorption. to under of provided Amy range her of published points. This of occupancy XXX,XXX and senior move-outs, their we commencements square level the of sequential the multi-tenant in the hard with lease net Combined last Our XXX,XXX of in NOI square the bridge XX the leasing multi-tenant want and at upper basis driving throughout lower work Leasing, multi-tenant jumped This in and leasing I occupancy end Poley, to for VP did year leadership feet the in in

and front, million year. during disposition the with XX% These non-MOB XX non-core properties of rate sold largely at assets Healthcare tenant. were On cap $XXX an for average single X.X% XX% the Realty

annual exited fully the of selling smaller is properties the X.X% by Florida, Evansville, improved the also for portfolio averaging We portfolio. markets most with broader Indiana. like we and What versus I Sebring, escalators growth like profile X.X%

longer a healthy. remain transaction over fundamentals and expect rate volatility. market period volumes we to time, sizes. interest continues operating we by of transaction deal stable MOB see smaller governed Our The lower be Until rates

For X% see now, in mid-Xs. in trading the to we properties with MOBs the to quality range X% of a low higher

expectations to is Healthcare outlook for leasing strong. XXXX. for Realty's Turning

by by they over new and, -- quarters X.X XX% MOB trend driven climb. X new Our years. in the pipeline over continued mentioned, lease down markets tightening remains Across development volume. credit Todd the were remains and across quarter, fourth have as trending million This square XX provides MOBs to same country, the down at feet year-over-year. months. of At past healthy visibility the time, starts construction increase been leasing into occupancy over costs has the a past has been several about In robust

highly in bridge sale XXXX our the change will and of demand in system be tailwinds development. supply-demand hospital financial and is the half the And NOI fourth of our completion for fundamentals outpatient improved first. properties throughout health XXXX. Positive expect second increased space starting to a investor goals. absorption quarter than also increase during for published the The absorption some during occupancy, steadily presentation. the the margins seeing volumes X.X% We It we and the occupied measures in improve. and year-over-year serve occupancy reported are improving worth couple for-profit hospital Recently, cases. is stronger noting as of reflecting surgical operating to we operators primary as recently multi-tenant performance a of that XXXX our hospital Additionally, updated

These are seasonal shaped by X patterns.

renewal first of First, versus expirations half the year we Even we the the the more of consistent second. million rate, the with million the in year in of move-outs have feet expect square first the second. versus half about in X.X X.X

in lower the the lease new historically second. been Second, commencements of have year the half first versus

we result, first. greater expect to the a second be in net half absorption As XXX,XXX about square year the than of the feet

on XXX gain of points for top in basis We of are reiterating XXXX this to points XXX of expectation absorption occupancy the our XX basis quarter.

start growing energized is a and They year. for great are leasing supply/demand tightening care by off Our services demand backdrop. health team a this to

Looking the growth absorption I'm drive of to NOI confident X.X% to second multi-tenant ability ahead, of half XXXX. translates in that our into X.X% in

it comments. turn Todd for some I'll to Now, back final

Todd Meredith

you, Rob. Thank

Before portfolio. our of quarter. for disposition XXXX. own over occurring outlook in a and I'll our $XXX profile allocation with and improve exceeded rate sales these cap X.X% million begin half capital the for We quality we our significant Q&A, touch 'XX. on at year, fourth sold growth expectations of our the We is the And what's in

shifting routine including $XXX pace of $XXX capital and million to expect dispositions annual optimization. which of obligations, redevelopment we're a In more ahead, 'XX, fund Looking to developments. will million, portfolio we

this, pursuing capital we're allocation Beyond accretive opportunistically.

ability partnerships In our to 'XX we've transactions. guidance, JV our strategic We conservatively sources assumed extend initial that our long-term diversify continue work and no demand. JV meet capital provider to towards

outlook NOI in 'XX. our fourth we what bridge occupancy and the consistent on in quarter. healthy 'XX, communicated NOI we bridge. We've occupancy for expect gains quarter, -- with our and growth the last strong Building updated our Finally, absorption occupancy

growth and driver robust absorption half upper us primary that guidance guidance, moves For range. NOI of our is the into multi-tenant FFO the

'XX For growth Realty, will in growth the Healthcare and in sustained FAD for 'XX. table attractive FFO operational set

the Operator, ready begin we're period. Q&A to now

Operator

first Citi. question from Our Instructions] from [Operator Michael comes Griffin

Michael Griffin

first. Todd, can the on maybe your back comments I go to dividend

elevated I around at into time CapEx, guidance payout would for could But at for that payout XXXX. think guidance and been about potential both helpful. any know if and some be color healthier for And implies ratio. being grow point, normalized you the about a you to be XXX% FFO has maybe talked warranted? I it ratio able a look some cut

Todd Meredith

Sure. capital absorption as that a for that our Michael, spend that we've we ramp continue. we'll that see we up invest certainly think in TI, said while certainly and that

of in range. generate 'XX and FFO with as XXX-XXX% in described will capital that Kris flow 'XX, FAD that the we in a expect will as So we're comfortable know And we're to afterwards. we remarks, through NOI because kind his ratio payout similar that that investing the

'XX an And in important so we really see transition that. as

see. what bullish very we're we So on

but Obviously, capital we love key in we'd to happen it investing generate that everyone, the sooner, that NOI. think and improvement to like operational is the

feel we very our comfortable. So view is

there As in that we Kris get remarked can 'XX.

at not And a can all we're our point. control is thinking conditions, obviously, certainly, we cut. we not NOI board so And will about but market that can't The view thinking that operationally, ratio. that about this is, deliver the improve

Michael Griffin

on payout follow-up flows? cash keep a I have would mean of you just is until And kind that you as And grow what how long kind would you Yes. are that. ratio of with? to the into comfortable

Todd Meredith

is that think a much that I drive into terms XX% payout towards covered XX% dividend I lot our the obviously what in view we drive Yes. And but below even XXXX than term like that, level. 'XX mean looks like is level. of think again, the long or we starts ratio, obviously, to 'XX lower

the take love it we see. that sooner, know certainly that's we'd starts in 'XX. think but to We shape that we see -- to So it's path

Michael Griffin

guess the Got joint of or a in changed seems $XXX it you. then now of kind that guidance what funding that. a know -- interest volatility, ventures one function sort of where front. and funding JV like out the pivoted are, to now? shorter rate And rates large laid time. I October, from million disposition at away I then a pivot Is cap of $XXX amount your maybe between that seed you in your million about on Investor in just a Day think of back versus I

what on curious just that your was. So thinking

Todd Meredith

away wouldn't in Yes. describe turning scale. we're of from that that terms I

challenges clearly, to I what times the talked we've financing earnings is NAREIT that Day, that with and as there folks recent about think in Rob interest lot or Investor it was described, rate go environment, cap since of volatility whether a that. rate is

we've more we very we've of Obviously, what large in And dispositions had view than have on so -- is a amount capital. not our covered needed hurry. a that been

more We think interest all that. rate serving pickup in we a reason volatility. things turned well no is to navigating there's than seen as rushed into 'XX, we've going. time hurry. is to and us view certainly our patient I are on Obviously, want how So And too be strategic because we're

million of that helpful. styles a of But our of $XXX view one. are take a us a of $XXX are call couple is it, couple we transactions rather strategic see But we think, proceeds that range. transactions, that, and we than couple just kind It of still maybe time, different for generate million will to over in may

Some core investment-oriented. may be more

more redevelopment -- oriented. Some development be value-add may

So coming we together. still see that

here patient volatility. rate interest we kind as being Just navigate of

Operator

Connor comes Wells The next question Siversky from from Fargo.

Connor Siversky

the the X.X In change looks you at just had the you question square It the X.X driving I'm new a curious feet. into what's X.X. of expectations? or One have million now that's function QX more to leasing the there, NAREIT presentation, on whether pipeline. in range the just having a number of like presentation, visibility

Robert Hull

Yes.

provide do X.X that think good way we quarters' in into think that, that new good several worth think it in expectations that will put of us said, around quarters mean, X.X all provides we there, that is that the activity. think and that the it coming I is the kind visibility visibility, new I out And think around. range think we of for time. in moves we in X.X investor where as of signed in that to mean, the reflective things it's X.X, of the it we to pipeline, range you does leasing. leasing of about We presentation provided bounce of and I we come pipeline that --

we're it's pipeline that seeing there, for we activity that laid that in XXXX. And so out -- assumptions that comfortable we're supports our and that the that

Connor Siversky

X about the XXX,XXX ratio right ] a a in And think through square XXX,XXX, Okay. square reasonable keep I then XXXX, foot that consideration maybe in snow quarter expirations per [ of Am million as almost place? to target feet. same to number

Robert Hull

Yes.

of in on first more terms we've look -- in that the the we of is I think year. I expirations, the got half at expirations the it mean, way that the

we more so there. are And expecting move-outs

absorption that in combined the second. commitments see the that, in lighter lease half of than year, be of the with that see we because typically that half so are we that the will way lighter the first -- the year first And of commencements is number the

So I think move-outs corresponding or that the generally applied that expirations causing to bridge, it's what's the higher modeled for in we've rate renewal increase we expirations and from in that. expectation that the

Connor Siversky

Okay. cap you during Just on full provide those in quarter, the could save contribution Could you sold average And that NOI for the me, the during sold last office MOB assets? the appreciated. rate to provide just from on assets would from if XQ. me be one the SNF the the math, doing

J. Douglas

number Yes. you I don't give cap rates. have but can me, the the front in of I specific

about so the income weren't upper we were X.X were those The recognizing we were any effectively, fourth sold up did SNFs, the everything on So quarter. X.X, office have some for in zero. We that end.

either of you up X.X range. those the being out extremes if -- proceeds Xs, X.X, the rate and that take about end up ends in cap being side, MOBs up So total the high half ends on

Operator

Capital from comes question BMO next Sanabria from Markets. The Juan

Juan Sanabria

about G&A. ask to wanted just I

that behind could I about that. maybe to Is to Just curious way post-HTA, it a terms talk the the of and little kind seem numbers, hit size about that the in recall increase of G&A a phenomenon. of was right you of was of it? that like thoughts sacrificed if bit the think temporary some compensation but maybe kind to seems just the the

Todd Meredith

of is you And to, have end therefore, really, change in Juan, in the of terms compensation. target up actual really even target it's in were the actual 'XX results we the program. softer the 'XX It's fact returning not And with our simply for numbers and a the in guidance lower comp. really, then a essence, that 'XX number accrued in in incentive the what incentive periods.

under target in levels a change Not So it's or of any big actual prior amounts. the kind comparing levels programs in just comp target sort years. the of to all-in

just program tough in the So as it's prior results described, And accrual comp actual for comparison. your it it's compared to Kris just really you place a -- the in always years. put really, the

Juan Sanabria

Okay.

technologies, then? the isn't and the or comp factoring sort that average to growth fair were XX% any platform investments getting the the of in Is below. So just you hurdle back rate that

J. Douglas

with mean helping I solid we're brought returning of Todd our some of on going say our think things inside that inside good -- us doing. investment and really major what kind as and difference the is of the comp. that's people that strategy of relates was would we We've the on some platform. the there to are to some of not change. certainly of But of incentive normalized driving I portfolio It to what's has talking about do analytics

you So $X.X the It or back -- that million, the of to midpoint, $X being getting -- out incentive that's range. so normalized around about is ends it's that comp increase. the up million at

And the is year-over-year of growth like up G&A you're so for the X% of balance the about. That things just a a growth more basis. talking on being in ends difference

of run difference rate with on talking main the the has the what that about do Todd was to really, compensation. returning So to performance

Juan Sanabria

-- for factored been weren't the have a guys talk a there, you changed there's Can have has it guess, just curious of wanted for Very expirations been you the of about If and just what's things FFO course if few bit growth I about first been not kind could single through to the talked I to to same-store surprise. of I But may has company, you quarter message 'XX the helpful. of the robust X% a talking kind quarters. look NOI tenant while. square maybe try try X% 'XX, -- like multi-tenant. to to the you over then whole just as leasing in year. a X% sounds evolved some over of the baseline last And of to growth X% that back X% pipeline

You started of to the see quarter. through fourth that benefit some come in

So X, could helpful would kind be just at end. our of super getting that you just if we're as definitely that on -- square those

Todd Meredith

Juan, did and laid that X% in seeing ago big we picture, think growth. I I X% bridge talk our last Sure. think year we out quarter -- you're that to just about And a what sort year, of is updated this throughout some of in ramping to half, expiration that the reiterated Obviously Rob the and getting really quarter that due patterns. described it. as multi-tenant second just up

Some we due leasing to of up in being that the that really 'XX. ramped

really it through to come throughout saw and You to in 'XX. the started quarter fourth continuing contribute

to putting do So into to we to together it's the it sooner. X% all show Obviously, back to those of the starts at love minus. pieces range, or plus half that we'd growth get that year, -- get

One continued And bit but certainly growth since of that this great operating rate nice expenses. little making in expenses of ramp little ramp on year probably more in a quarter, down ago challenges progress in. a maybe have we're some the is the going or again, projecting changed has operating improvement headway, We're a stubborn. a a that been up

is it, throughout the and growth some momentum but knowing of that towards we at and driving as and goal on X% we've there really just, getting So more of it end multi-tenant see X% by goal to the really same course the approached obviously, 'XX. specificity detail

Juan Sanabria

Okay. And follow-up, sorry. one then just quick last

you for comments? Could was high help the the side. but just below the absorption us the on in square that came saying multi-tenant at You those occupancy quarter X guys were end,

Todd Meredith

We supplemental, -- delta was press sorry, in the fourth Page in that were that those We you -- whether that down particular touched we also development. release, this in really a that that this -- completed remarks. our starting supplemental the sold quarter the in it's the had And we if on his look X you X part or on -- occupancy, those properties our out I occupancy higher -- it of we the sold point. Rob of brought starting yes, earnings really our -- when very cases, laid of think and clearly calculation the

things in, those bit. starting layer you occupancy when came a actually down So your

XX feet is absorption. So very of still and square much actually, the XXX,XXX the delta basis points

So the adjusting for had in sales obviously last the that that's And adjusted those projected as that you're the be transactions, -- the the something your to occupancy starting time portfolio always and development we completion. bridge evolves. occupancy

make as is starting clear that that still tried of at we change as top and to show is the the possible point the different, just range. to obviously the So end

Operator

next is JPMorgan. Mueller Mike from The question from

Michael Mueller

commencements stuff, occupancy year kind to regardless you couple A dips of up? just it timing does guess commentary year-end? leasing from kind XQ the finished Or occupancy questions. least just XX.X%. about given it move-outs of And at the going the XX.X% to multi-tenant that in I versus and of before is safe say from head up of that

Robert Hull

Those moving expect from here. think a expectations. going move from don't to are dip our to QX. to is we QX We up that that say would occupancy I see

J. Douglas

going in be Just that not saw to pace same the fourth you quarter. at the

saw as the quarter. be opposed to significant could slight we it a in positive So the absorption fourth positive

Michael Mueller

Got it.

was XX.X% the at leased leased rate. year-end, for then And guess think side, I on it take, or give -- I the Okay. the

the leased that expect You've embedded you what's the side commencement think on seeing presentation rate out lease where higher in is going. you mapped the occupancy Do is occupancy rate? in as of just to physical what well? climb the Or you're

Robert Hull

Yes.

basis the and of in would got delta think XXX two the would what expect between see between commencements of that the don't moves forward, -- right -- moving up. XX.X%. terms would now, expect we've about the I much occupancy smaller. lease the points in the near I as those move that -- two, term difference -- those I that we're I And XX.X% that that would two would together seeing move getting getting

Michael Mueller

Okay.

is leasing well. in new as So there

Operator

Gorman [Operator BTIG. Instructions] comes The from Michael next from question

Michael Gorman

math the Obviously, to the how maybe of the about to my synthesize Just just growth X% then in start is last the how kind giving make going like into as FAD think is dividend growth way X% And but in the one that out mid- correctly, not about 'XX. to questions guidance, plays wanted of year. towards some the the in move is single-digits in here what of dividend the years? it's plays upper is out here. and end I run kind on be year kind 'XX that rate coverage looking that 'XX what to going sure want FAD you even 'XX about we're that implied. I questions is think to earlier would if outlook XXXX, is out of that doing by to I'm we such know at or be thinking the the and you're if of of XXXX implication

Todd Meredith

would I say directionally you're way. headed right Mike, the

I it's 'XX retention for we're for rates are typically an and very about The multi-tenant a obviously our have but be to lag side our earlier was backfilling bullish asked on strong, tenant calling single is think that side. question vacates And effect. single-tenant sure, fine. early

in we an visibility so And for don't single have tenant as example, into expirations perfect 'XX.

will. 'XX. of implied net call terms in growth early potential in dividend of implied math, coverage the in it's suggest the number, if to But right you're the terms you So what would

going see So very certainly bullish a uptick we're that on strong into and 'XX.

exposure maturities interest We're rates. brought everyone, rate all big our watching 'XX. we've don't Now at variable significantly. We looking but that, have we're like down in

quite can 'XX So we you that being strong see, we said. from of see can exit as what velocity

Michael Gorman

momentum. on you as see that about maybe Okay. I you lot think absorption, me mean strong just of lot Great. a helping of leasing a 'XX, that. exiting And out then

well percentage is weighted the a normalization obviously, to the if $XXX we million bill online be expect thinking of $XXX as towards as Should the about we NOI I'm So half million, the of of year? coming that So guidance we this a as get going 'XX? back in CapEx a benefit. as about think is to NOI front-end CapEx

J. Douglas

we of back it I think even on able to up seeing but a new We of percentage being sustain 'XX for even escalation the at of 'XX ultimate is NOI the moving still what through certainly ended maintenance late it of that you the are But into XX.X% getting terms moving the of now. that really of additional depends a right I level similar bit additional timing NOI I and the then the we're on was you seeing leasing 'XX half way all drives an because in CapEx. if benefit. to year, that year say and spent think the a all 'XX, just from it amount. stay for we forward in would leasing occurred start that

in spending growth maintenance that earlier we CapEx think yes, of FAD? answer think NOI. I in assuming see decline is a as the percentage much still of So a can would without your even I significant your stronger I question I if every would of about that it, a expiring call that's think back say percentage year, that probably leases talking you're that are we -- that the get CapEx. on XX% of maintenance of to regular NOI

something. cut So half in going it's that that like we do if number assuming some not be is normalization, It's to degree. or maintenance to see going we're to be that CapEx

Michael Gorman

just maybe then And Great. last one for Okay. me.

over obviously, if that coming conservative this Is morning, additional Does in is at to dispositions? is if out? of being potential fruition Just JV, JV? the just guidance. to conservatism? the that think of I should kind fee from look trying Or the do your that to Or through not I'm that year. play in $X.X income? bridge dispositions, of course of release the the Or JVs dilution we place How the the in those take how that understand So conservatism? about the that place million the the million including of is $X.X on come it does benefit

Todd Meredith

necessarily it's No, substitute. say wouldn't a I

think I to disposition. continue expect would I the

hey, our course leverage-neutral is we be maybe timing to think not be proceeds, for we is I obviously call portfolio forward, impact, that would say, level about Some back optimization. unreasonable be have going that way could buy think there, for One us be positive rate it, ways. related, year. and a would is would combination run somewhat we can minus. The that normal just plus about the maybe if that JV, think simply other point get the some off a did an And how really, We to way debt, key million, that of that much would stock. of And $XXX you anything say, but X hey, that the or Obviously, accretive. to pay maybe of to be would do in then the and would that involved our return that redevelopments then you to capital we your have what commit or to reduce smaller developments, -- continue do you enhance would projects. it would on dollars dollars those certainly spend to you do commit

impact there. would timing a be key again, So

So of the with you it's sort do proceeds that. and joint structures from venture what's of timing what do the the really

that, specific And specifics and then direction more of have not so keeping it certainly and giving will layer out on guidance, that we that. and in on obviously, progress as we update since we're we're

Operator

from Green comes question Street. next from Pawlowski John The

John Pawlowski

to X% question tenants. and I about signaled and what's really to structural go but shift and change, to on May stickiness Juan's X%. want about care last pricing portfolio, And total growth when in don't power changed between a from I now things you guidance more back concerned the the same-store in

know to so challenging, and And divide much bigger to more it's expenses. X% much signaled between being is -- it to just -- growth X% than same-store more I you like feels pointed X% expenses previously

that? What's changed So can single in retention just It's -- of of changed in portfolio? big tenant. or multi-tenant can expand you What's the a with talk you shift. on the tenants terms

Todd Meredith

Yes.

aren't Obviously, those same-store. growth, key total pieces really think to the the roll of I all is, see one a what upside different go obviously, is over time, piece, of think will, occupancy talking into about same-store about was even into And in the same-store. assets multi-tenant. some we same-store in things is that I it versus probably think way lot that the

our and but side actually have development back side, increase could in they So our assets upside. a come in redevelopment we of same-store that lot generate

the currently. over of but may when of so that, those a really talked as it's And how an I've at be projects our some going all it's really roll same-store, together or the range. when difference. properties those been important matter properties we roll the about but challenges It's illustrate into retention beyond to well. running do subtle, We're that same-store. have that's edges, of get the bridge to that But time, become why And multi-tenant really into put

XX%. I XX% X%. We've in that to bonus be That for of would retention, really conservative get but or will that think change XX%, really have needs in huge at kind up to get to a single for we a quarter, and what plus that we about operating us been drive the see were not there one absorption talked to expenses. The year, we're a other think bridge. about what fully side. We're push to that also in X% was hit we the we're our the mentioned, that not those assuming somewhat further. certainly in I simply And one about. in of for there the maybe is it the on, and properties that but X in that touching here Kris already would context about Obviously, because that us 'XX -- lower we right I tenant talked 'XX is expected positive

the are below is X% in single-tenant about about portfolio in that at escalators the growing place of those X.X. So

a is little bit difference drag that that. so on of a And

able we may again, of that. address to So some be

one of to assets. As sell we're Kris the looking said,

redevelopment The a other is play.

out conservatively help. evolve those that additional and if can of growth to to so X. But we've will And leasing able out some go are of some out those generate improvement, we or assumed as those work sale, those, we a

piece I would the say another conservatism there, some there's to but So puzzle. that's

John Pawlowski

question debt. that. the Okay. just managing sheet duration how Todd, and the I appreciate balance of second on all you're

So to X or average of maturity maturity to average years years. months about --

taking duration the risk got balance expect remain similar? you more sheet longer-term years, off unsecured X-ish $X should the refinancing billion are swaps interest we table? to If Or issuing of rate open to this type pretty of you on expiring and debt

J. Douglas

Yes, but I'll is that, you where is call at always on and it any long-term couple it, on that debt. has certainly ago, to the improved going with we issued think always rates years X I new look were, use -- on in associated the the from No, We're we that's and then that. gone got with that, interest related in to months table. haven't Kris. X, Yes. volatility everything and proceeds. your But of at last looking up everything jump this of obviously

of if we be certainly anticipate as right that have so redeploy But a long-term to to and as we financing we'd matching at source of now, debt. refinancing a move we that were And able something like looking be accretively. of don't those we use proceeds would to do forward debt expiring really a

Todd Meredith

Yes.

maturity or next Our first summer 'XX. is bond unsecured debt

opportunity certainly, and to said. to as closer be keeping maturity on eye you we'll that that as So get an that, extend duration we

Operator

[Operator questions. Instructions] We have no further

hand any for So back the call I'll remarks. management team concluding to the

Todd Meredith

you, thank this us and joining everybody, morning. Adam, you, Thank for

at Thank we for We upcoming have conferences. will and Everybody, be follow-up seeing available questions, of look your day. forward and many a you to you. some great

Operator

much This attendance. concludes for you today's call. Thank your very

now may You disconnect your lines.

Healthcare Realty Trust (HR) 16 Feb 242023 Q4 Earnings call transcript