Healthcare Realty Trust (HR) 7 May 242024 Q1 Earnings call transcript

Company Profile

Participants

Ronald Hubbard	executive
Todd Meredith	executive
J. Douglas	executive
Robert Hull	executive
Nicholas Yulico	analyst
Austin Wurschmidt	analyst
Michael Griffin	analyst
Juan Sanabria	analyst
Richard Anderson	analyst
John Pawlowski	analyst

Call transcript

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Operator

Hello, and welcome to the Healthcare Realty First Quarter Earnings Conference Call. My name is Aviat, and I'll be coordinating your call today. [Operator Instructions] I'd now like to hand over to Ron Hubbard, the floor is yours. Please go ahead.

Ronald Hubbard

Thank you for joining us today for Healthcare Realty's First Quarter 2024 Earnings Conference Call.

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

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

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

Todd Meredith

key first our Healthcare operating pleased Ron. were our metrics. of Realty at Thank you, the half of FFO to quarter report is per strong results. top was as share expected most range

absorption positive allocation X was Solid tight on and multi-tenant retention, growth driven expense NOI and momentum. tenant goals. Most leasing by operational cash capital we're improved operating robust priorities: top focused importantly, spreads,

priority capital near-term accretive top our is First, allocation.

use from to as quickly substantial discount FFO growth we JVs accelerate and a on improve the NAV. at as intend leverage-neutral repurchase trades goal as a stock coverage specifically, sales is basis long company dividend express to to Our asset possible. More proceeds as to and

in there is major next with capital of more proceeds that And step, within XX seed initial expected more $XXX cover JV the million detail we relationship announced strategic portfolio, behind KKR later. this a a to days. As yesterday, I'll first is generate KKR which

We also average April, million favorably implied we range. another next the asset represents very XX which The sale cap X.X% levels. an transactions. and of $XX the million in rate, of X.XX% $XXX X% to expected expect to days stock accretive And price separate from at in rates repurchased proceeds cap JV in compares

Our is This were second primarily in quarter increasing operational gains priority momentum. expectations we occupancy. our with in the track multi-tenant about bridge. Occupancy that communicated first is on multi-tenant

and second in we to and the XXXX. into momentum quarter leasing volumes absorption expect remain gain elevated, second the New half of

published of quarters will Many ago. X initially you recall, bridge we our

which to absorption, 'XX. by the leasing of diligent We effort absorption of our XXX Two generated through X operations XX on is teams. quarters, I'm have focus pleased with track XXX and basis and exactly to expected our plan. points the quarters points over of increase we in, particularly end basis with

in last new Our leasing X of of has than quarters. each feet produced XXX,XXX square leasing team the more volume

occupancy. multi-tenant important pace our ability elevating quarterly to is an of continue This indicator

occupancy operations above well focused first operating is growth leases team new converting Total X.X%. XXXX expenses. NOI quickly accelerating of NOI the quarter, X.X% to and Our on in grew by growth multi-tenant controlling

the achieve second the on published Looking of for X.X% multi-tenant half ahead, we're track in growth bridge to our X.X% NOI to XXXX.

existing for buildings Typical and for replacement demand. plans. setting rental are multi-tenant outpatient gains increases the boosted utilization robust and more tailwinds rates. are MOB to These expansion providers patient and financing absorption the net supply the and demographics rising time, construction a translate are costs by higher. and backdrop more up is Aging Our that occupancy constructive rents and pushing are in sharp rate has At pushing severely Hospitals steadily demand limited strong leasing and low rents same $XX initiating rise development at confidence range. for net starts. positive $XX, in average

Now I'll turn it over to Kris to operating and discuss financial results.

J. Douglas

The operational capital was FFO guidance of of Normalized at efforts. is for income and quarter. $XXX on great upper Net our our the quarter was the macroeconomic driven potential the and accounting Todd. to for share per of or start speak a current goodwill a impacted allocation write-off. to year assets. noncash Thanks, the end by $X.XX This durability off million the not range was growth by environment impairment does

In of our year-over-year average in quarter points margins the expense first escalators NOI in-place X.X% improved a X%, quarter. Cash fact, same-store XX accelerated operating growth result of rent holding NOI as last basis cash to up below from growth X.X%.

X.X% improvement expenses operating X.X% compared significant year and but full service of expenses. in quarter year property in are on bridge. beat occupancy and the X.X% 'XX. markets appeals to the particularly X.X% resulted growth This to quarter contracts, costs growth Disciplined and our the taxes property increases improvement in and proactive quarter first rate, first X.X%. efforts, quarter successful was fourth fourth 'XX. scale. labor with helped staffing on to The for new tax the increased to full the especially a the for and compared be don't in was achieved property in just year rebidding X.X% expense assumptions in in costs and NOI The Labor quarter year-over-year X.X%. XX% operating fourth control increased we and tax run in to track We first the quarter full expect through the rightsizing quarter First

X.X especially detail, to spreads feet the impressive quarter. X.X%, scheduled of sequential are feet square expired to occupancy as million in Over absorption given The as tenant And lease first in were Revenue million XX% successful total and spreads, absorption more and discuss tenants quarter. to quarter square retain retention X.X% Initiatives with Notably, retention from will in leases leasing expectations. achieved drivers same-store was the X significantly improved XX% high legacy expirations HTA portfolios. the in the pushed and Rob over fourth were we both last the strong quarter. across also consistent up leasing from the first. in cash line HR the portfolio. were in in Cash XX%

announced and agreement $XXX JV a near-term proceeds a with of source of X.X% provide million generate rate at long-term KKR will cap a we that Yesterday, additional capital.

price In share fund These addition, are leverage as repurchases. days. are of separate expected total on transactions are million generate X.X% capital in The will $XXX $XXX process used additional next commitments expected proceeds that the we the in be of million to in neutral an X.XX% to XX proceeds as range. transactions to well to

of implied X new excess share, to repurchase bought over will shares the an proceeds maintain which just of April, represents million and to was repurchase the of program. $XX our million XX% X.Xx. authorized approximately of In a FFO $XX range within under to for the million share to debt price yield Board approximately per share $XXX average week, Applying X Last X% EBITDA repurchase previous The cap XX% authorization. target XX%.

accelerates to Given the generate valuations, and our accretion private coverage. current neutral It and disconnect value. dividend between shareholder significant stock to leverage improve efforts also and recycling repurchases share price capital

leverage KKR of full these quarter or will and updated Guidance does JV the as the of are economics final be neutral end second of quarter and timing not share million the Second transactions associated at additional reflect repurchases. year known. the guidance transactions $XXX

for over turn to more now it our on I'll details momentum. Rob leasing

Robert Hull

Kris. I occupancy which and momentum, right will with my our gains today focus multi-tenant on Thanks, comments leasing on track are bridge.

basis puts with points. first XXX XX,XXX basis feet Combined multi-tenant noting occupancy our HTA fourth basis points on of our basis assets us points XXX deliver increased or XX square occupancy absorption. to For by the X occupancy gains have This achieved last we the and XX to at of pace improved quarter, the November quarter, bridge. It's multi-tent we in has the last XXX points X-quarter worth quarters. that communicated legacy

Our by double in was Move-outs strong in million feet This new expirations commitments driven nearly of lease the square totaling first previous were X.X the to was scheduled square the XXX,XXX feet. progress expirations volume of due quarter lease quarter. quarter. high elevated this

Although high, in with move-out expectations. line percentage volume the was was our

over than about This remainder the schedule X XXXX, square exploration per For less quarter. averages is just first quarter. million of the XX% our feet

fewer expect balance the the of through year. we move-outs So

lease Turning momentum. to

XXX feet, into future visibility lease our points outlined robust basis in the to X.X end new points remains remained XXX multi-tenant pipeline occupancy. of additional us The future or The properties well bridge. achieve gains of and us at square top SNO of leases occupied representing the positions our have million Total Our signed legacy activity multi-tenant gives solid, an historical HTA pipeline absorption multi-tenant basis projected SNO. range. in not portfolio

moderate to our to increase forward. pipeline We signed and expect moving as the lower lease new maintain move-out volumes we levels SNO to

starts Occupancy Our across and is by continuing climbing, new favorable supported outpatient supply fundamentals. the is sector strong building to are and decelerate. activity leasing demand medical

we quarter, the This starts since in the year-over-year saw decline pandemic. largest

System are revenue operating and And rate than rising creating outpatient more of care leasing. health employment The margins nice at rates continue increasing a to top a robust, Providers X.Xx supply limited Health remains revenues. seeing improve. of rate combination is demand and line and growth. growing for admission the total tailwind increasing job

The across in combined leases square meaningful What marks New this consecutive quarter. our quarter in XXX is this last XXX,XXX noteworthy approximately now first the third our lease percentage signed and were Included for redevelopment projects quarter over XX%, $XXX,XXX. development points is basis is gains up projects. totaled feet. above these activity

complex building came leading building that the to tenant first last fairly A many to to this increase this significant quarter. A occupancy new of contributor XX% is and group that we XXXX. signed leased the fall, take Nashville online the have XX% in in a a in surgery of lease visited. including you expect increased the orthopedic here a quarter center, With from build-out,

I'm team sustained occupancy of of pace leasing new solid achieved. and has gains proud the our

for new backdrop leasing strong the half Todd? which of move-outs, foundation the we absorption the our produce in can is supply/demand growth constructive the levels. back multi-tenant projected we poised from Coupled leasing and year targeted moderating activity. are against hit momentum accelerating to Our

Todd Meredith

Rob. you, Thank

make comments NAV. me allocation. a more is discount to capital Let currently about The a specific at substantial company trading few

we're stock So the levels. to our at and focused JV opportunity sell accretive on repurchase assets or maximizing

closing a gross we equal generating approximately of the properties proceeds, X.X%. joint the joint where to will contribution asset retain oversee venture is $XXX property conditions a reflected value the not and venture million, HR Realty of the an of in announced for JV leasing interest, customary XX% at and KKR of contribute rate probably HR throughout June. the proceeds make overseeing cap May The rate. various million. Healthcare will to to HR properties, of XX% X.X% earn yielding XX KKR will expected yesterday, the value will to operations. manage equity which and are a occur are fees representing the to $XXX also JV JV terms In properties, of and subject the contributions to cap

contemplated financing for Asset-level leverage this JV, not the which Realty. is Healthcare management simplifies for of

in represent portfolio looks Philadelphia Seattle, properties located Austin, including or lot a properties a like campuses. Healthcare The and JV on few. whole. Realty name Los XX stabilized are leading X a as And predominantly a in top They're markets, MOB hospital adjacent to high-quality the portfolio. to located Angeles short,

the the depending may in Beyond a of has Realty also on could to contribute more $XXX priority acquisitions additional leverage-neutral term, JV pursue than the equity up increase We This investments our value the repurchase basis. near stabilized the initial to properties capital to assets. stock to JV high-quality portfolio, KKR In seed on Healthcare billion. million $X market allocation committed conditions. to is or more pursue of potential

to that encouraged than more Separate from are JV, expected from to the and proceeds to of XX by of a KKR been of additional There's partners the has within which $XXX generate financing we're market. pool buyers. much seeking exposure a the We're MOB equity very interest next improved deep level transactions working the days. aided sector, by capital million on potential increase

capital and quickly with occupancy execute are focused growth momentum. Coupled toward goal operational gains on top multi-tenant capital at the momentum, operational we allocation priorities accretive priorities, I and today. coverage. progress FFO outlined allocation We top, our intend As and X we're on dividend making said to of our the accelerating

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

Operator

first with Instructions] [Operator Yulico Our from Nick comes Scotiabank. question

Nicholas Yulico

process the give to of little you went? just first, in on JV, see that get about terms last you of done. talking bit that I nice information know it I us started a sort more Can fall, think. I And how guess,

assets did sort discussions so buyer Anything put the groups you more background ultimately you I types seed how closed the portfolio? else of mean you And of you change the formation. it on did just -- of are initial now. in with different the that

Todd Meredith

last as markets alluded Thanks, we which last tough fall did as to, just you a Nick. The and start debt Obviously, all little equity process, well. the be watched fall. impacted

So be time rough to knew going to was to force we transaction. the a that try

So and of beginning we it off really sort year. the kicked of more that at slowly the took aggressively

So improved more equity with even throughout have bit a 'XX settled say expect mentioned should though is constructive so we this more be. open as little my then I capital where and still saw commitments and people side would stable, people better -- on to more in a fairly market financing far. a things And are rates into think high, little the up much to I I the markets starting obviously, remarks,

much saw as think became more I so that confident. folks the equity And we

potential the But of it generally underway. evolved were contemplated. of a portfolio sales and lot The we we terms JVs early more involves speaking, on have the asset properties that In bit. do has a portfolio,

properties the other under asset of were sales. ventures in Some joint there for that or other will consideration be

a Healthcare landed we a with strong, intent a of bit think was the sales, is the partner, JVs alignment stabilized to which JV little with we that moving on a asset tend Realty types of we've trying really single-tenant target said more off-campus last portfolio, which, very portfolio always bit towards fall, representative those So to little characteristics. find leaning and versus as be our a but

Nicholas Yulico

Okay.

second question Steward. on is Just

potential know with remind fallout sure square if I anything And thinking any but the remind just assets. of the us potential give just rents? how about supplemental, the deal you any XX footage to us, affecting of the sort composition I you are there's kind wasn't built into Chapter actually filing could and there. guidance in those you closure If of -- location

J. Douglas

this is Kris. Nick, Yes,

on, dozen on be hospitals. states. But we're generally, So their to a are about X campuses different performing associated with higher-tier we hospital different Steward in consider we

done. In some to likely think in. fact, because our think sales hospital I better the scoring do associated About what XX% outcome which potential hospitals some are the if index you they their look A as had ultimate here, hospitals. I that they rated Street, that is critical of or at And Green of footage to communities very those they is they're of that that with square

state they're making hospitals going year seen You've out that sure and last kind we possible Spirit Common everything keep And do hospitals of we really coming and communities. through that in the to Massachusetts out this when open to to confirming -- some with saw Steward those to Utah. serve those sold

early here feet, of associated outstanding repaid, upper If base absorb about little with that that's hospitals end are for could the right, our about with we annual with The that range X.X% you're Steward. something of the these is outpatient a our XXX,XXX inside going it's outcome, are is and think operator. be rent that. if guidance of that of So square million of the critical I and to facilities think, but company we bottom ultimately new ultimate to $X.X potentially too it I the have about sold associated we early year them, call think the really, to for are is not AR

on. we're feel we'll that but locations the generally to about it, So continue positive watch

Operator

to now We Austin KeyBanc. Wurschmidt with

Austin Wurschmidt

the path completing to of Todd, Or assets transaction at the we has additional dispositions say you've market to go guys selling point? for And I would could you you it's that down done are see towards after this million say $XXX fallen medical So kind fair highlighted? mean, continue a that outpatient today?

Todd Meredith

Sure, Austin.

lot what have works. to we KKR today the we a what tried say JV additional a the high more these in as would like have I done. transactions. is Obviously, we of in not are well articulate We degree confidence as

that that realm market as I we reason conditions. do transactions would out markets. well wouldn't we'll look additional we that. But paying have Obviously, So additional we're as most as of asset put makes more at Obviously, balance the that what the sales. sense. watching the JV to of behind We're attention

Austin Wurschmidt

just drove looks NOI track, specific same-store operating multi-tenant Understood. wondering -- there the between And was then was or portfolio but -- the on unexpected the buckets? this in the deceleration quarter is anything curious, sounds like X everything on that consolidated JV growth? the those front for it like unexpecting just driving what's I up for delta but made It that,

J. Douglas

and particular a quarterly a stat. just you end to that back going at can really have any year-over-year can look quarter, you up specific onetime impact kind It's Yes. when with of on a items fluctuations

multi-tenant, right time those that growth, it accrued with in of that against contesting. and it bill some taxes first the the period, to really of were in them 'XX were you're I'd associated X.X% some terms and are was 'XX that kind related quarter that that say So in of went actually that was came

still a actually say But all air bit you So flip the on for the of be on impact kind little up will on will single reverse the tenant. the the the ultimate what I 'XX. had in that's of side,

tenant that expect once bit would again, long So would to side the that growth a related was flip and single I that for a similar say versus was little to, on the item what onetime positive. the term, was escalated

that And X%. normal of same-store very so X gets what and I you is those kind back growth total other offset expected of each think a to

Austin Wurschmidt

me. Would And of the you the convert for that's year? those it balance to expect them through

J. Douglas

Yes.

year-to-date as have quarter-to-quarter variations of I smooth don't large an kind to start and impact. those start onetime into out of and as you think getting performance, that full year

have not other set total said, -- off. versus big that do kind of I So multi-tenant But will again, kind an the once think of each the single-tenant like of and yes, impact. on adjust I that,

balance total year indicative the look that think as we've So absorption the expect think that we accelerate things to we at store, it's with you same of I the that today, where are is through and about. talked of

Operator

question Michael Griffin next Citi. comes from Our with

Michael Griffin

I couple wanted joint to the on questions ask venture. of a

and the you And venture of the are implications maybe leverage potential any off, of dividend us? us the was in fees a expect the deal result or the give then you used there as First from receive joint can sales? of that asset to amount

Todd Meredith

Todd. Michael, is this

being specifically initial no On also not the used for contemplated go this well. the transaction. is leverage, the being -- It's forward JV, leverage as in

simple organizations KKR. can equity simple. outside that leverage X manage very the from Obviously, there, It's So the all keeping of JV.

level no asset So financing.

On obviously, fees, the operations earn to of fees not going I'm specific but various certainly managing fees, and so types give the JV, fees, for forth. leasing,

these to -- said We point net benefit XX relative of would of X as cap put JVs range JVs that have to the in we have existing sort that as this typically well typically basis rate.

give you to often they're to But Just performance. obviously, ballpark. a tied

known quantity, of exact So economics but it's that's cap to a JV. certainly rate not an and the to the

And this expected on evaluate -- it's dividend, the year, point. dividend as a early special we'll trigger that the year at change But contemplated would dividend that the but not at this or obviously, something, that's to point, point. anything no at in the

Michael Griffin

according debt wanted on morning. by that's the ask in XX-Q this Steward. like just guidance? $X.X about million any It looks then there rent to bad Is to it's assumed And owed your the

J. Douglas

kind no, bad just run debt. Generally, of of kind rate

updating X.X, small. amount and is of the in range I our of of balance the percentage guidance we look that pretty overall it's is contemplate But guidance something of enough the we'll large and the terms NOIs, terms through of at guidance, year. as that think, In

accounting a likely to reserving we material handle and be that. to of we'll having that, And it to have that that's So we I see are that don't in impact in a of how But not say watch position conservative terms uncollectible. AR. we our continue obviously We'll there.

Todd Meredith

there's And nothing XX days.

us? was [indiscernible] So hear I -- there's nothing -- just Michael, that saying can Michael, you

Michael Griffin

yes. Yes,

Sorry.

Sorry, there's phone, apologies. something going on with my

Todd Meredith

XX the I adding past That's there's no okay. days. just was that AR

on question. debt kind bad of key a point the that's So

Michael Griffin

of the current Got you. there a the what Chris, assumed bad like of amount total be in terms dollar quick, your amount And debt? bad in then would real guidance? range is just, And debt

J. Douglas

bit We handle as of actually XX days you little down. had bad generally over is we had reserve We that's we actually will way anything a quarter, a this that debt. bit But of collections. see little our would the even came

And so bring can that back we're we still that optimistic down.

we collections impact offset the if able But be certainly do does what that, But will Steward. well to of exactly as it's have reserved. guidance on Steward could above help early would is have Our to say and potentially that I not we assume we're think that AR. as like too just yet that associated what that said, we anything

Operator

with now Capital We Markets. turn BMO Juan to Sanabria

Juan Sanabria

we your the doing FFO you you about trading discount guys wanted earnings what's earnings stock we dispositions where rates, joint and cap Just should should is as how ask to about to the in see are think ventures to to the think dilutive on but or math your end? of at granted, a impact it the that and accretive or

Todd Meredith

accretive. is Todd. we it as I this say Juan, view would

your maybe immediate term affect technical is think that the more I how might earnings. and just in a little question

I debt, simple math pay is mid-Xs. immediate on term to which variable think you use the proceeds the that low in would rate to is off the

a about you're Kris double-digit at repurchasing neutral. stock. it's say, on And And puts potentially equity So quickly it talking nearly question just the that right then you're how yields I you've portion. of heard think there as

to to couple So I'll range. cap of the implied it back for X.XX% can that's to And ways, you a The which current the at accretive. then X% it math is in high JVs at, climb range. simple in the at HR very look get sales where X% asset we're you looking quickly X.X% looking we're and but rate as

of to points So that's XXX basis accretion. XXX

math XXX you WACC GAAP so basis also a cap specifically to get debt yield, around that similar can at FFO of very and look rates versus cost XXX more points You basis like math, accretive.

should think out how to pretty XXXX. about get it's absolutely quickly that done. actually you think question be And the specific we is can accretive I timed all

Juan Sanabria

given on dividend to think check, accretive AFFO CapEx or the do you FAD and post a it's basis gap? just And

Todd Meredith

Yes.

Juan Sanabria

the million of placeholder is seventh Okay. of a cap. cap for roughly And just dispositions? Do market see then it $XXX million you rates like that kind front, a And today? the seems cap X% a on give disposition that that incremental incremental is kind at of as good $XXX

Todd Meredith

sure you getting the cap where X I'm wasn't X. up picked Maybe you're intended. that not something

Juan Sanabria

I X.X% think you and was is X.XX%. that said blend was the at JV at the and X.X% like

the So what figuring roughly sales just was...

Todd Meredith

Okay.

talking No, Okay. I you're both what of that see really, being transactions about is within them sales the asset the range. between what range, saying. in we're to JV and X.XX% other these X.X% being the

So mean we're the might about I not individual cap, at X no, at be doesn't that not -- an thinking being thinking asset we're but mean X. asset a sales not

I we where range can X.X% X.XX% think really indicative we think to is an transact. So

Juan Sanabria

one. Just last one

So that dollar just about that should in amount? How they that the think is quarterly $X.X quarter? the owns, run million did the that rate Steward we pay first not

J. Douglas

rent. than a less over about It's X months, months X.X but little of months, a It's X.X month. Yes.

little mostly So a of March. April, bit

Operator

next question Wedbush. Our with Anderson comes from Rich

Richard Anderson

always contributed your spot. the joint has the properties been venture which sweet So on adjacent, or were to

adjacent very your sort still that, here, So into perhaps more to the largely reducing side up by function beyond the off-campus Should Or exposure we perhaps as circle this. definition, concentric a and business? of much remain exposure about of increasing your you you're margin or do of your story? but at to jazzed growing committed getting read

Todd Meredith

I signal. as wouldn't some big this Rich, take

we would go-forward it capital bigger with us also been continue years diversifying message that whole, source is in. but in that to you've the continue sure a a JV and those as that is lot assets. about KKR assets be as right a I but vehicle the like invest a a idea not really to has sources to allowing theme types in the it's Realty the and here us to capital talking of looks making And Healthcare see to investment for a that's portfolio of sources idea here have only the we think continue capital of types of in to heard invest the of want our to invest past,

of up wouldn't So that exposure or lighten shift read part is it this into our trying strategy. I to that away. we're

In adjacent consistent. fact, to opposite it's would that exposure to probably campus our continue remaining predominantly on we to see the

would you're Obviously, little, we it for that math maybe think, over the materially at Healthcare the tweaks XX/XX a of on right, wouldn't do you margin, change Realty. the if it time, really JV, but

So part no of the seeing near versus advantage really in capital. and public just in long there disconnect big source of that that having private. of our signal then valuation another The term, term

Richard Anderson

on Okay. you're know targeting a to X.X% leverage X% I basis.

market X would too. I think a the perhaps love eventually, handle you would

would With at the point would of the additional Or in that future? can might go to would test intermingle reasonable looking some that still sub-X asset in you sales level lot we way that beyond think the million, so buyback? $XXX you that you're more a maybe that the of deleveraging

Todd Meredith

comfortable say X.X% at Rich, we're would I currently. very

a away per FFO the you're we're accretion leverage. managing I near talking longer-term term focused our and is about not FAD driving what taking share and on from you. it much But really think view of and

of number that there's is that through naturally sense. of repurchasing right now, it So improvements in NOI will a operational it delever. ways think think and we EBITDA shares clearly, But will a we the makes signal naturally lot

difference So continue to Obviously, that's do. signaling a this our it. leverage in reevaluate on But conditions view point. as evolve, not what at we'll we'll

Richard Anderson

for me. Okay. Last

in policy you that I into not sort that part simply dividend, are number? that like of terms of and the you payout, situation any better there grow to XX% perhaps get near dividend REIT that's that intermingled Is fall because in And but the so you influencing dividend Is the we're of really cut that the the strategy? you know just strategy? then below threshold. going Or a the payout. of do On into could can't to you're guidelines, if nowhere

Todd Meredith

would look it's I strategy. the at in our that's concern. that's but we Rich, year not the that Obviously, say every influencing thinking that evaluate not that, and

It think grow takes allocation into that. transactions, that itself. capital that accelerate when is it. you operational do now talked we've today, a that improvements. we obviously longer can about can priorities view little We Our by the add the And we we with can

So it's confidence there. get really can that a we

Operator

Green to We with Pawlowski now Street. turn John

John Pawlowski

I then portfolio shorter share average? of few more average dispositions. the a profile, million way it just is $XXX of and have questions deferred Can pool than is or of -- age or CapEx your the maybe the on worse and properties the meaningfully ask to quality it, better you of the kind properties

Todd Meredith

newer. would speaking, have generally don't The the I average I but change. if newer think, And in generally similar some don't very it's little we vintage, is age stabilized range speaking, it's But -- in CapEx, a me. I would in on you that say little say, of portfolio. average of material the sort But front me, I of will, bit percentage front a but not typically of have a

range spending improvements, a spending So more that more stabilized XX% on a but little over we bit more range. XX%. and of year, we're little absorption that tenant versus that with like currently were last traditional more in to Obviously, do had

J. Douglas

youngest was oldest but can range don't the building give constructed was a XXXX. of originally I in have weighted you the 'XX average, and age. The

consistent the let's So generally say, portfolio. with

Todd Meredith

years. last XX XX last the Most years, in the predominantly

John Pawlowski

pretty average? then close And $XXX remaining the portfolio portfolio the lease -- the walls Okay. it is million, on term, your the to

Todd Meredith

X% KKR It's it's a a -- a on X we're the remaining... versus -- being the little over X years versus It's little X little about assets. years bit over about overall longer. JV portfolio little a It's

John Pawlowski

over you me. years a XX Still as properties few in question Okay. lot bucket. the -- what have an Final in There's about unstabilized properties characterize bucket. of held this from been last your

not These curious, to any that business? then properties redeploying are in properties? capital sell nearly elsewhere these generating the appetite NOI and just So the unstabilized what's

J. Douglas

always sometimes that's already. it a got at. looking we're for that just time actually it's significant certainly just now back release dropped off, can issue that and been Yes, we're We've something up. -- some us inside portfolio that we have that occupancy amount. And also, And a be to it is timing this

XXX% that would at dozen it's Just probably trying number a I the properties, of to half dozen properties count to say, are a leased.

that converting turning back. percentage and into lease just now so And it occupancy it's then

long that portfolio out on efforts overall, So some assets of specific to sell in absorption submarket a of and of term that places in I'd to properties goal of if going drive But we the those some long market right and or those that cluster you our it's combination see number unstabilized much say that we're portion as lower. could it's the looking assets yes, a it's that -- grow in well. drive or is to in our even of now not that expectation a -- term,

Operator

Nikita now We JP Instructions] Morgan. with Bely turn [Operator to

Unknown Analyst

recently The term there's to retail up that in is been tail is that you conference has something come on the med of retail, more calls see starting And medical right? world similarity office those of medical any properties, Is centers? business any those Any overlap? on impact there the medical kind retail that with overlap some seeing and your outpacing and maybe? you're

Todd Meredith

looked for They're a to at other around focus retail say the quite over good convenient. but develop in a has tend retail it's while. tend to concept, types acuity the even to the setting. and about really more pretty years, buy those trend those We been selective What consumer hospital med things. question. locations. We've underway certainly and services. properties for not I a when to have new would They it. medical very doing the It's services. tend fairly we're or that of a to is more try acuity they're convenient higher tail, They're low for see in you it

for of certainly our not a It's there's but target. good lot consumer, we think for And the needed so generally is that. room it and

We to big services be that acuity closer the do, tend location. to on it which what we're for a is trying higher hospital the in problem more to focused haven't be seen

Unknown Analyst

Got side, versus And are return any and -- maybe development on new start hurdles next the ones that maybe over redevelopments those months some or potential the the plan any process? it. major on XX developments to in projects they

Todd Meredith

active Sure. projects. I'll around in of our our generally just have pipeline that comment speaking, disclosure terms we or

that as involve might about that to the term. could mindful both as existing a our comment that the new that in exercise, or JVs But starting sensitive right simply projects new. near be cautious long-term because at we're be of are pausing the development now dilution want we new would even very looking well be said, of projects effect for we're attractive. now to fact That though projects, right initial moment, can the dilutive kind be returns just projects We

as want of we're sort mindful near-term looking at but we activity in So creating impact. as we're that something that certainly an to continue doing value of term, shareholder long

terms don't seen think bit. I of the changed ticked disclose. if you I it's a thoughts it's just in terms of up from have But us Rob, don't -- what you've In any -- know return,

Robert Hull

I is risk XXX and think to where assets today. stabilized how years, mean be to on of above it leased it's trading similar think, points going well the sort dependent we we've taking. prior how But I quarters used basis in XXX Yes. generally, are and much

looking development So that returns if redevelopment, a X% we higher they're on that. you're range X% probably certainly, in target the in new to mid-Xs today, for

Operator

with question We KeyBanc. from Austin have Wurschmidt follow-up a

Austin Wurschmidt

of in they on for you growth see the multi-tenant the stable Just one another goal sold joint then that is of so on the the same-store to the have that some side, either more and you you any guess, tenant and I I monetize on And the this outright assets that announced assets we sell assets for ventures last value? can growth could impact quarter single sales. kind into or flip guess your that asset similarly the single-tenant improvement quarter?

Todd Meredith

pushed be bottom multi-tenant at company's the looking occupancy Yes. selling gain because really makes margin Austin, line. we're and it at assets sense assets simply the through I get to JV-ing think you're we that right the that stabilized can

stabilized drive there. say, would would occupancy the and we what on us a you of are Kris -- addressed can may we just Obviously, think properties we that." where "Hey, I don't But fall more earlier that's JVing have that so of see on lot assets. And unstabilized where We'll and say, selling ahead go the margin, more some out there we sell optimism.

in That also more said, would development projects or market, is the today I as properties. look projects. financing JV-ing just new mentioned, certainly, And existing whether at conducive some to projects, they're those potentially we types of

And the impact that Kris, touch of So I if think have. on I know, we're could at those. to looking don't want -- you both

that really obviously might I asset change as into think that same far on we progress it's impact update how sales too too make store. get to or We'll early the on JVs.

J. Douglas

I agree.

Operator

This concludes our for Meredith hand closing Q&A. to I remarks. now back Todd will

Todd Meredith

right. you forward at for in visiting you, day. Have few weeks the with All look many joining everybody, conferences. we various Well, appreciate a everybody. you, us and Thank this morning. thank of next to your time, We great

Operator

gentlemen, you concluded. your and Ladies call for We'd today's now participation. thank has like to

now disconnect may You your lines.

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