Healthcare Realty Trust (HR) 2 Aug 242024 Q2 Earnings call transcript

Company Profile

Participants

Ronald Hubbard	executive
Todd Meredith	executive
J. Douglas	executive
Robert Hull	executive
Austin Wurschmidt	analyst
Michael Griffin	analyst
Michael Mueller	analyst
Richard Anderson	analyst
William John Kilichowski	analyst
Emily Meckler	analyst
Omotayo Okusanya	analyst

Call transcript

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Operator

Good afternoon. Thank you for attending the Healthcare Realty Second Quarter Earnings Conference Call. My name is Cameron, and I'll be your moderator for today. [Operator Instructions] I would now like to pass the conference over to your host, Ron Hubbard, Vice President of Investor Relations.

You may proceed.

Ronald Hubbard

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

financial distribution contain FFO operating share, FAD, per measures as also FFO, the FFO, on the call to for SEC any specifically are for me XXXX. These funds normalized income, or this estimates, The financial the of Rob contained Joining EBITDA in assumptions, measures company's represent the the call may judgment adjusted discussed may Hull. A certain quarter most Douglas available XX-K this company's Meredith, within, uncertainties. in statements from reminder and may forward-looking available or Form release normalized the XXXX. Kris funds such EBITDA. A operations XX, risks call reconciliation and these material. FFO ended measures NOI, net per December company update filed the information the contain that Form company's GAAP of in that forward-looking discussed year for June with call. share, the and now more turn supplemental over in statements matters website. I'll except call to found on Todd. XX, matters release, the date press forward-looking obligation company's information today historical ended company's as in earnings are involve this Todd discussed The risks The this XX-K These of are to the and disclaims the earnings be press comparable non-GAAP

Todd Meredith

a Realty joining for us strong Ron, Healthcare you, Thank everyone, you, second quarter. thank had and today.

objectives progress are notable we momentum. our on We accelerating and are capital operational our allocation making

reserve. by our XXXX the in This increased $X.XX and were our year second generated normalized FFO execution momentum full have midpoint results Without previously reserve, the $X.XX The the more quarter, the impacted been increase about by we $X.XX. first would For was per share. Based per strong guidance Steward $X.XX revenue reserve. on disclosed the share. without FFO was half,

we $X JVs In generate asset proceeds capital than to or planned sales. from terms allocation, more and of of expect billion completed

Our JV growing, we expansion and is Nuveen. existing with of an with JV our new recently KKR already announced

of cap over redeploy XX% including to at date, $XXX we've capital, this average sale points rate early from in we about come To second almost asset of With JV and stock levels. expect points, cuttings proceeds these total at an to million equates XX X.X%. this We the quarter of repurchasing cap JVs. To XXX discounted rates basis repurchased JV fees. X.X%, well or implied spread contribution to basis at asset positive moved

ahead, continue we equity remain if will repurchasing and opportunistic accretive. it's Looking

accelerating to momentum. and operational We're gains. seeing trends occupancy strong Turning leasing

signed, occupancy second above of end the square leases guidance. bridge multi-tenant consecutive more of first The quarter XXX,XXX new half than our the XX half top feet of points basis gain first quarter with marks fourth and was solidly our

level, off. XX% to high We retention reduce and This improvement the with vacant step downtime paying expect move-outs leasing from operations into tenant has year. and second to avoiding dollars up quarter the Their comes benefit strong retention. commend higher to I the pleased Higher materially to XXs half lost service efforts momentum, mid- the are especially with XXXX. I'm improved avoiding from space. our quarter which consecutive and really of re-tenant continue and want second rent our teams. last to our levels is this momentum the second at

operating controlling expenses. successfully also is team operations Our

nearly declined the expenses year-over-year Second half. and flat first quarter for are

operating reimbursements. worth the expenses below 'XX into taking our expect tenant X% grow X% net noting full year. to in the We expected operating in to growth to expenses account X% are contained well after for in It's be range

strong grew well-controlled reserve, occupancy in same-store of As a second expenses higher growth. expansion. The the translating quarter, to is result, X.X% we gains the are grew NOI Steward margin and NOI combination the multi-tenant seeing Without meaningful X% half, growth these With are the of ranges. NOI level. we steadily multi-tenant our in total the X.X%. NOI are and Both towards at high driving momentum of strong end guidance

to Turning volumes. on commissions investment capital. as is absorption Spending CapEx. positive in maintenance strong expected on new TI based elevated revenue-enhancing leasing and This is

highest this capital In terms by allocation of far. investment priorities, our is return on

be $XX revenue-enhancing Excluding XXXX. going into million $XX this to is estimate expected this which our million to be to capital, dividend fully year, we covered

Looking sheet, lower. be to going transactions, through to we is Once to we as higher sale JV to approximately leverage occupancy we gains EBITDA. asset the expected X.Xx. leverage And further balance at XXXX trend expect leverage expect flow and into the complete our announced improve

turn Now to sheet. guidance discuss and Kris? balance to over the results, I'll it Kris

J. Douglas

Thanks, Todd.

of quarter strong Normalized first half $X.XX. has been the execution. per marked for the was and operational The share allocation year by FFO capital

the points XX.X% XX new a materially and retention first last of Cash costs commitments XX.X% leasing for the of outperformance The controls. Revenue down efforts, and and controls. Year-over-year X.X%, taxes came for sequentially Excluding to XX NOI year. NOI benefited strong the without square guidance XXX,XXX and reserve last gains bridge improved was came lower reserve, the X.X% strong the year-over-year the result move-outs. our absorption basis occupancy and multi-tenant of decreased upper of better-than-planned expense to growth year. Tenant expenses NOI at as from cash of is margins end XX improved and successful points previously operating proactive tax spreads. quarter This end lease basis and of performance of appeals up disclosed which our X.X% almost revenue per and $X.XX. Same-store $X property Steward late at almost recoveries a X%. driven sequential growth from sequentially of by The basis absorption share feet combination NOI Multi-tenant to year. points expense quarterly discipline improved expectations improved upper million half FFO from decreased cost for the quarter the net declined were from quarterly Property on year-over-year. especially labor X%, better-than-projected X.X%. the absorption was X.X% property revenue from taxes. Labor

We expect to benefits below to escalators below these well expenses Operating NOI contractual X.X% bottom overall be full the in at full the half, the our will X%. in-place lap less but total of line dropped of or second of expenses year margins. improve some and absorption impact operating

funded NAV. asset average implied $XXX XX% approximately a Turning generated cap JV buybacks. commitments to proceeds repurchase X.X% and million $XX.XX, $XXX and have capital contributions proceeds million capital representing The of year-to-date. or The allocation. stock was of price existing discount to sales

and billion The total JV over sale asset $X existing $XXX For million and repayment capital million the of combined share will accretion. capital a and fund proceeds. increased to of year expected This and over the expect in $XXX was buybacks. FFO guidance allocation in million the year, XXXX share of annualized. capital $X.XX of share are $X.XX allocation debt for $XXX we commitments generate and per proceeds reflects accretion over

pay quarter. the updated million and Steward sales. $X does in as approximately guidance did operating It reduction in the repayment monthly the to they million XX $X revenue incorporates we'll asset addition, rent second in July. continue of does lower the of taken in of assumptions not assume expenses rent midpoint that of Page XXXX reserve June on expected from assume guidance supplemental, straight-line and The In the G&A including a

debt reduce X.Xx, expected leverage will loan an sheet, on maturities debt to less sales and next expected combination Looking than The will which The asset to of lower dividend is drive improved expires July, payout $XXX ratio details it debt $XXX over run and to for leasing into leverage rate and progress. term the the now pay off operational moving our our more remaining momentum balance for is that million. XXXX XXXX. I'll allocation the including Rob JVs. repayment repayment capital to million turn

Robert Hull

exceeded multi-tenant occupancy quarter, My for the exceeded comments top momentum. half half Thanks, guidance occupancy strong in and the in net of by into and year XX%. bridge of absorption feet. Coupled gains the basis gains points was and the XXX,XXX we first our the year our XXX,XXX feet. bridge leasing year improved XX or focused multi-tenant our total expect and for level, today XXXX. We by over further the be square of first with second half a portfolio this Multi-tenant will square the Kris. At sequentially guidance end the on first

Our driven points move-out basis new and was a lower than commencements outperformance greater-than-expected over by was lease rate XXX levels. historical that

portfolio. ability Over worth gained multi-tenant X last This puts of in basis we XXX noting published XXX top our led deliver track our of first multi-tenant points absorption of the is of guidance. X-quarter to have period, of the X.X% assets multi-tenant occupancy that to points HTA bridge. our on same the in growth gained us end November It last portfolio. Strong legacy to occupancy the bridge to points highlighting the over gains quarter, basis basis occupancy half second in also XXX that total XXX at the quarters, NOI for our absorption drive

sector starts been new demand by MOB and lower. climb favorable to this supported activity leasing across year Occupancy supply has continues Our fundamentals. trend the continue and to

over square since This most operating quarter, on margins and top line the reached MOB X.X million absorption the continue tracked. Health has feet, revenue record to health system is continue sector the improve. solid data rising. in our been expected increase demand and services outpatient volume X.X% to revenue annually trends. to term, next the decade. are seeing Longer at Providers we on expect Spending care

largest Over spending Xx U.S. XX. The rising are those a age ongoing the for more the over leasing and creates at will support health supply same Xx care limited momentum. demand users over than to the new more services, grow tailwind the than population. those of time of under And rate XX combination group remaining XX period,

totaled of important quarter driving to absorption our of consecutive XXX New our signed this projected year. of approximately the XXX XXX,XXX, quarter part feet. in gain square marks above fourth points an basis leases this XXX,XXX the second Notably, equation

level lease outlined absorption our X.X the square highest new and million feet pipeline projected in achieve its to ever. well bridge. reached positions quarter, gives This us gains us in visibility Our

robust in multi-tenant XXXX, This the drive new portfolio. in Our XX% our beyond. absorption at occupancy leasing early well of XX.X%, growth the With team multi-tenant executed level and and will has and we innings to in continued across delivering half NOI of current multiyear first reach solution. XXXX outside are plan outsized of a a

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

Todd Meredith

Thanks, Rob.

more just make comments Q&A we portion. to shift before few I'll a the Now

the so, announced we by highest our I far. is fund on priorities positive which transactions proceeds mentioned, term, excess our are such existing investment are or return our and JV capital investment the near In redeploy. obligations quarter to capital have asset to absorption to our completed sale As first over expect next as the allocation --

or neutral trending the Second, third, And to price accretively to discount. stock repay lower. repurchase leverage a at keeping debt, if trades our

well half an we're tailwinds is building is be to 'XX HR our half keep momentum poised in guidance bolstering And for Full executing XXXX. on demand and based objectives. operational and increasing outlook FFO within shaping leverage Realty's strong outpatient are and to in to our So coverage of terms second first is reach operator, of up XXXX with results. and 'XX. to External of year and important the on strengthening lower. Cameron, move XXXX Healthcare and balance We're supply Q&A. robust now allocation dividend MOB ready 'XX sheet limited for expected improving trend capital to

Operator

Instructions]. [Operator

of is question with first The the BMO Sanabria Capital line Markets. Juan from

Unknown Analyst

Robin for in Juan. is sitting This

any Are the compare the what's lower does Steward, expectation, they they on to keep? much looking rent? it to to Just space look market? contractual how How

Todd Meredith

This early clearly hospital closely to me. the to Still what go. front, are very really is the be all speculating very happening Todd. excuse may that's early, bankruptcy may driving attention paying where on be on It's we this through process that very and Robin. Sure, Obviously, process.

news And where the pieces outpatient needed, sorted a kind we're the it and hospital good I will down engaging, we think of are play space out. to is are so that the after point out is

are versus about generally So we're And that what in space done it's material other where really there's we're and that. not of view about hearing feel assessment. difference be We're speculating. The one an way market. we've too used any encouraged our will We about to very tell. We say don't not, rents very by just early terms obviously, is thing speaking. good speculation any or I rents can what

Unknown Analyst

the estate And Steward that else? impairment the curious. was to related million something Just or in quarter, real $XXX

J. Douglas

close to No. balance asset are that It's here expected the related to and sales of year. the through ongoing the

Operator

is The the Markets. from next with Austin KeyBanc of line question Wurschmidt Capital

Austin Wurschmidt

next just XX months. is Great. curious think Todd, how I'm XX% you sustainable the over retention XX to the

square be given on lower. single million another this quarter next year, guess, appeared single-tenant retention I side of you that, expirations recall, also understand the to move-outs some think I X that have year. to this trying Just foot multi-tenant tenant later I

to that between holistically trying bit single breakout think and little time the a So multi frame. well about as it as tenant over

Todd Meredith

Good sort of in with up as XX% the around pleased versus sure. a it we're a to very in brings bring single-tenant quarter. average know, bit, so year-to-date Obviously, single-tenant now or couple mix it Sure, up But isn't tends quarters. you little maybe Generally of being multi. question. for X% this high, speaking, the

out And But service and in I very say, work some can year really were I generally retention. Service to Obviously, gear. with aggressively come upper portfolio, XXs the thinking the in really to turn be do range. we really tenants team we're we've on very levels see to the would to we whole the we is across XX% that think fully we And hit portfolio. where leasing our expect what are through making them. mid- leaving, last them numbers who speaking, retain were working of XX% innovation concerted increasing multi-tenant levels we strong to The efforts to to continuing in be see about the around really as seen that may side, also that the strong.

time all vary. you importantly, think really XX%. quarter teams. And we we absorption. think talked XX% range not of to on but multi the the of frame this think So joint the over any same levels it's multi to produce year, XX% across sort XX% we'll backfill on and sustain higher about to do and really across this it's rest and only or generally really, Obviously, our I backfill of next paying can positive can effort looking given But a I to in single be single, similar single in year both create and working that but off. And

Austin Wurschmidt

hitting of growth That's helpful. guidance piece, same-store the portfolio. multi-tenant And kind on implied in maybe then just the half back

you is is is think changed half? me. that forward of X%, there I growth conservatism a in range perspective? at expect performance or first X% lower That's all really haven't Or that the the to back that's you something in from that half pulled half, better back achieve end that timing to or X.X% the for else

J. Douglas

not halfway year. far good as through say things for of We're far but well former, just and it's upper quarter. were expenses are especially the occupancy We through where would the conservatism Yes, ourselves. I being the on halfway of operating ahead as year, at so terms it's end feeling ranges, too get the in about try both of of the to those progressing

Operator

is question with of line the Griffin next Citi. The Michael from

proceed. may You

Michael Griffin

was or there tenant specific in leases Or increases? drove more went rent back kind delta? It of wanted rent It this tenants maybe cash quarter-over-quarter, quarter. something like this I to XX% cash the declined like X% that interpret first looks we leasing ask from the including pushing leasing. this spreads slightly of negative on spread as on bucket. to it Should market about looks up

Robert Hull

Michael, this Yes. Rob. is Yes.

occupancy. And to worked out places aggressive that spreads more that but were rents, we've I would -- push coming about our where I deals we're negotiating backfilling what they a we some say and rate, this as think really averages we we've and it increased is where forms, year, comes lower above push space. quarter. this able right, of price-sensitive focused can being where and on avoid there. also occupancy we're seen cash TI certainly even costly that are X where You're to markets move-out But dynamics through those driving X.X% leasing and markets, I in keep results had that think maybe in we doing have noted strong we occupancy more downtime from market we're we're points incremental where kind are the put to the And

aggressively where on that end tails and -- [indiscernible]. -- that the working of aggressive more then being top of we're noted And kind just was spread, bottom you end. the really it's pushing So those the more

Michael Griffin

CapEx your as then But about now we color cadence to of need of as the to to is as And benefit the I And impact on CapEx occupancy there, you Got invested? going Rob. occupancy that result the be kind going FAD what result think to upside near-term in you. return that, a of spend CapEx your you're on of Todd, spend do Appreciate new at or guess future. get leasing? this for the I much how of spend then appreciate comments looking the kind a

Todd Meredith

And on all-in divide for about highest for to that's our average XX%, on absorbed you way a if mentioned I've kind is gross on end, can far. by that percent a we the it the cost by a our $XX investment marginal And around is the clearly space return -- Yes, type return, of marginal -- revenue gain then Sure. that simple portfolio. the even about obviously of maybe high returns think $XX XX-plus from great capital. new lease, it's to

from opportunity, a comparison home it higher So an as standpoint, and run returns. looking at something much to doing, almost that's we our much, even want but investment external to be

hey, X% given through if our year and the that as haven't run we have there's that way. we're million absorption kind probably We're really broken just not off out ratio So year, of $XX you that enhancing we $XX math. very of -- think next such, revenue is to it expectations frankly, that And similar just that's million be payout takes the much capital. but can talking view just you would about, this

dividend as get our at look XXXX. coverage we there how of go into piece material we and a it's So can

Operator

Mike is JPMorgan. with question Mueller of Next the from line

Michael Mueller

comments occupancy your going above about multi-tenant guess XX%. I

of you there are And frame an or a to that sort was lease expecting what comment? time by? occupied First, get

Todd Meredith

Yes. and occupancy. pipeline we're half multiple XXXX. talked to years, but we report a can that that about with that a and certainly into out over Mike, percentage when about getting along leasing years, this optimism we of and talk over multiyear Obviously, gives we about lease it our a plan push gains year multiple of And versus lot second Rob looking of us delta the is XX%. talking track in occupied

be a XXX you that's it's if at XXX the certainly year, so we're but year range lay to early saying specifically. similar to we'll little of down of And that gain year. probably But in next multi-tenant about points look 'XX, in terms a another this portfolio, basis in thinking our expectations strong

if real So some of that about thinking frame, as you started that's sort headway and annual 'XX time an a in 'XX pace, that. making on but X-year

Michael Mueller

it. Got

Okay. That's expecting helpful. the And are then with activity second more you question, JV? Nuveen

Todd Meredith

are working underway on that. We

talked transactions $XXX with what, we set about Nuveen. million So of a, roughly

So that is work underway.

And so some of couple on your I guess it's process, closings. question, in depending a

much... very So

Michael Mueller

mean, I beyond that, beyond program already? should thinking we that as of the $XXX think kind was I of growing million a flagged that you

Todd Meredith

absolutely an It's option.

embarked we of that to our up was efforts and earlier ramp sort upon to As they year great. table interested the came this this process

strong obviously, relationship them, a together. our So with JV in have regularly existing we work our properties with them on

multiple relationship. really they've back that times come So through and

necessarily grow way capital It's -- KKR existing of to it. It's bit to we to it's not amount of an like with always a differentiate equity a capital want not commit So little said, option. maybe has expressed certain a in KKR.

more maybe a opportunistic. of commitment it I look more to KKR versus programmatic would way that it's grow. It's So we'll being the describe

Operator

with The from the Rich is of next Anderson question line Wedbush.

Richard Anderson

at the you it, didn't you program, CapEx do payout. So if you'd mentioned XXX% be revenue-enhancing

of kind you that. to alluded think I

to So investment opposed $XX great with dividend payout that one we coverage down incremental would to you're -- to to this getting as wait that dynamic coverage do that if How isolate to million $XX returns continue much longer these shutting it would you between do for going and now, way? which million just dividend on and or have let's coverage. on not

Todd Meredith

have capital still those and with with think covered dividend approaches occupancy a the of that to a absorption outsized the think ramping bit, end Yes. towards that's then sort of can towards revenue-enhancing even that maybe We but in our we have. This trajectory you ticks the a process about over obviously, Maybe extra X treatment and 'XX. flow-through. of we capital, But there. without if problem is little good to obviously and drive the a

starting comes all that the to go, out the FAD So get further that NOI, more clearly, you coverage. the EBITDA, beneficial from you're

So maintenance it 'XX. late a there in revenue-enhancing get sort becomes concern 'XX. CapEx, into really it less as But you is basically going capital than of treating separate of

that's So difference. the

Richard Anderson

Okay.

question. Next

guess You've at does sense it price, is buyback option of got the first back of that the off table? billion I is the levels? dispositions. at make part buy stock well, $X the question today's still to Or And stock essentially these

Todd Meredith

and the kind the way would gets different stop get today green, there's the Yes. a accretion the than maybe express It's for we that's probably to just yes, pretty discounts where I then NAV fade. there's And I'm the but to the -- using XX% is to accretion to to use and where you're what analogy, light into sort say yellow. less NAV market red right, single-digit, are you maybe levels. Once of discounts And starts math it of NAV, XX%, consensus minimal.

been which a sort good moving thing. trading in that's so direction. is where It's right right we're And the of now,

in down about the NAV And XX%. then average and early. as said, So way bought discounts got We sort we to continued XX% Kris XX%. nearly of to all

we'll So it. opportunistic. be little jump dislocations, if really, more is there's see on a view think that just I gained. we our be And And can we'll

Richard Anderson

Okay.

leaves So that the question.

program, and You million, and million debt then $XX see, repurchase. capital share got buyback we'll $XX off, on this

asset are creating stream impairments. Your of sales a

the repurchases, debt? debt for prepayment associated on math? since there and you of impairments the And other on be potential will penalties can both weighted with penalties that's in so So on be deployment maybe that more then that sort And the factor. comment is the for will more the one potential ghost prepayment

J. Douglas

Yes, Kris. Rich, is this

about those some really valued think So it, were had the been of we on lot assets have have take the to a merger. those, at yes, that but of impairments,

in kind at point, cap that were were rates they put so low to mid-Xs where And of on. the

we're And them selling in we're so saying, now the mid-Xs.

doesn't really on. that's the that's impact a that impairments balance all have reason that on statement and income your what so the But at And through change the you going what's going happens that accretion. on are sheet

continue the we some we'll sales. continue that so of see with asset as to And

In terms of $XXX $XXX the I have down terms right repayment, the We second million debt capacity still lines. our bank mentioned draw loan, we in quarter. of in million. delayed term paid now

We million left of have 'XX. $XXX that was set to expire July

So off cost around that be there's is of X.X% priority associated penalty will the a and that that. And prepayment to no ours pay with on overall [ ].

debt not it's that have type certainly paying a that line And we negative then So drag well. to a a address balance down. we'll as significant be of that bit of

see prepayment now, would penalties, having from but what options. then we're we So consideration take not considering get increased into as it, right if we're generally, we our into to that we certainly

Richard Anderson

year of cash then chance more could sitting by these than statement? the Is a moving because of good that So this fair be anticipated a all there's end on you parts.

Todd Meredith

revenue-enhancing what No, redevelopment you comes capital this it's first about think look talking look million that gen the about Rich, Kris out our $XXX funding, capital it acquisition prepared described the remarks, was at his capital. we if way that is $X I development, at about, That's there's I billion, in think first. if back obligations you

And million there's We've $XXX $XXX that's million. million repayment, rough there. in at guide, think a $XXX if pull used buyback. flex neutral, some for debt you out, for of you you're about for million So leverage stock XX-XX as then buyback. Obviously, $XXX $XXX up million stock that

So pay off, debt debt, $XXX at it can and look about the Kris between loan it's about term kind you have just million. -- line variable we rate we of mentioned. if leaves our us million And Kris that $XXX that with

really we'd $X I scenario put it there. Rich, cash excess increase let's a that way. see we're billion, to proceeds beyond don't sitting have where our on So the

Operator

is question Wells the next Kilichowski John line of Fargo. The with from

William John Kilichowski

uses sources largely ]. what other with is opening mentioned Or in the for and to the to the you there been for Earlier accomplished do with follow-up has mostly plan -- accretion. of just the with proceeds you with remarks, I'll rest do that do year-to-date? of to [ Is what year? on question that disposition the $X.XX what last

J. Douglas

the of of in that. million executed of the that on work. the repurchase a entire debt what repayment. year repayment $X.XXis early the the the already bit combination But the just we're the you'll really this And and leaning capital portion, $X piece all 'XX billion, the more I what share basis, have leaned then the it's combination share $X.XX to an portion year, repurchase. We $XXX on for called back of The obviously on half of million and little on I'm about be to about that now kind at But a the looking and so annualized here debt Yes. talking on be $XXX $X.XX for but clear of that. on the of have allocation doing year is goes

William John Kilichowski

of share $XXX math right out Got CapEx. at like you now, uses, the it. look just as the we're repurchases. the broke million And at we million And $XXX then

where line repayment with leaves today, in some of you $XXX Assuming on million I side. about you trade the term your debt down paid that you are loan. know

$XXX left would on line. rates So the rest what what the is those today? and And it about loan the correct? on then Is give be paying you're could you that million on of term the

J. Douglas

Yes.

rate, X.X% X/XX, and And X.X% of paying loan the different and $XXX slightly line. the term on as is but on had $XXX those drill -- and yes, million there million we're delayed right So what on we now.

address that We non-hedge proceeds. term as have we additional also could have if well a little with more term loan did we loan, -- bit

William John Kilichowski

Okay.

incremental about thinking guess, I then KKR. And Okay. here 'XX $XXX the million with for

protections accretive course what if trade do of NAV fades. Or to there? that I start action and premium the disposition you program you most have this Let's capital? attractiveness any a next of for at to say, guess

Todd Meredith

as right through. now what talking I John, just that about Yes, mentioned, and our focused $X Kris the we've priorities on billion are walked been very

of kind and for commitments that So the speaks it's of repurchase really about. existing capital our talking debt we're stock really repayment. And most

As you and as as and with opportunity sense it fee out look an accretive is becomes putting less makes can price imagine, you're accretive you structures stock it's our right, to JV, and there further, capital. more

So it's that on that incremental that's We look a KKR depending evaluate valuation. JV. higher ROI. But our we'll something through acquisitions at selectively can

starts as or As to NAV a relative really a you get value premium of sense. make a said, we to full lot that to

green us So to get but we've this external you in sort earlier, growth. for clearly, range, yellow of the I light, mentioned sort been opportunity of as for great that's as a

Operator

question is Green Emily Meckler Street. from next the The of with line

Emily Meckler

would the Nuveen is occupancy associated the I your term do with JV. assets average of similar better it the to dispositions like understand compared lease JV? portfolio age to in to faily average? recent KKR quality remaining And levels and How the

Todd Meredith

question. about. billion into but Good necessarily this highlights, portfolio, we on And actually dispositions. our the this in the we've do that X the have X. account JVs that owned HR and key our break we don't takes sort investor Sure. out presentation. page been It's a We between of the portfolio, specifically, Page JVs, not $X And wholly differentiate talking

in are down the XX big probably look JV to There's MSAs. geography, you XX XX% if sort and a quite portfolio differentiator, similar, range difference of that, are MSAs. top the the the XXX% at our where XX%. main So Dispos at top

some Nuveen that we're then similar those campus. own generally owned difference later to a on big markets, of strong further slightly tight the say occupancy, high typically a would similar but just part preferences balance important seeing levels maybe a difference. I properties between maybe profile. And this there, to around not very levels us I between different KKR, and And idea a but that's going is wholly much, X pretty similar say would and our dispos maintaining lower. hospital So groups, clustered our aspect huge it's a in the other the are and sheet obviously, where or multiple cluster strategy, JV, much among

trying that don't as page. than comment, occupied. out more you slightly and although balance team to sheet assets sell differentiator do see leasing, some sort of much JV So keep note, encourage see opportunity average also don't We'll of but X I on necessarily as the JVs things Typically, as well. One a escalators lot stabilized similar, upside Rob provide are even I things are maybe wholly portfolio. keep and generally the growth improve to we're you is his We would it's where going to And wholly important stats check the to balance The that much some on of sell as We'll escalator, other dispos the so can. those higher to one occupancy on some occupancy, other there's the we trying dispos sheet into owned. differentiation, lower. On highly tales. think owned

certainly, So look page more good if we follow at. to a there's questions, can that's but up

Emily Meckler

Great. question XX%? big market. you say the of And How intent one the just XX% top the would of versus more then the bottom transaction bid Okay. on generally your depth for properties is

Todd Meredith

see? you pool the Say Emily. the I or top what did the big XX%. is that XX% got bottom again, buyer what, versus How

Emily Meckler

The bid intent. intent, the buyer bid yes, yes, pool, the

Todd Meredith

say, say lot I Typically, wouldn't both a or maybe top an say think I discounted at there's it's get to go ends. there's looking But don't. of the can they for better. they bigger maybe things say I they they think a lease can it a quite hey, end. opportunity we there's would would prices where definitely folks pool lean I buyers at at market gotten up,

So it's improved dramatically.

other there a been gotten The better. factor financing. That's lot, has lot

would harder helped deals go And changed if both dramatically. I to ends of That's back say, so months, were that. you it's But X actually big X, finance.

other was the to loans that smaller maybe weren't bottom So good with end where financing way it that's one-off do get deals and the actually syndicated. you at could see. done And

end. been say both -- towards would at deep pretty it's trending it's are I where either neutralizing So

J. Douglas

of One Comment that LOIs transaction we're I last of right think add it the what brokers would to representing us months. yesterday, XX was and CAs to working quite and the ratio that. market that XX And they've on Crowley depth talking an now was time. over the improved he said of indication it's I seen is the highest how the to that that specific and to one mentioned we're seeing in some on I Ryan just

Operator

is Omotayo with line Okusanya next question Bank. of Deutsche the The from

Omotayo Okusanya

operational kind good work of coming on Great It's the see along. the Yes. to staff side.

and going been kind have what's made [indiscernible] overall part your in about about I of a bit think little bankruptcy forward filing, the there why already got X process? and through as issue, going just Could the that on thinking of On XX-Q canceled statement leases portfolio? Steward is there any there's HR maybe week if there's how talk you about Steward about a the

J. Douglas

have other small. leases, X,XXX it's off-campus. were is I feet, very X buildings were those these under minimis, believe, and that de say Tayo, didn't I'd they any square operations in were and Yes,

of really So they were the of that it with just was sale kind hospitals. matter the -- things what small happened didn't

de those it's overall things. did But minimis said, the occur. so in small, I of scheme pretty And like

Todd Meredith

Tayo, Kris in this else, it point, said, inference frankly, those And relates were, of there's one-offs. Massachusetts. And as to would everything no say kind be not would at there even they I as -- from

not really So at material it's all.

So But may out. what again, encouraged speculate we're try we're the it's hearing kind of early generally process. what to even to in play

-- you. your won't Tayo, I comment, maybe and thank So forget

I think the ahead. this are pretty outlook and team leasing and the work of about the operations quarter sort ecstatic

So comments appreciate your I there.

Operator

the conference to There like this at to any additional over for waiting remarks. management are I would team time. questions the no closing pass

Todd Meredith

Take Cameron. follow-up us many joining will Thanks, forward you care. seeing Thank of look you, it. around and soon. for be appreciate for and everybody, today, we and available We to

Operator

day. and your Realty Healthcare participation, for the concludes rest enjoy you Conference Earnings Call. That Thank Quarter the Second your of

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