Healthcare Realty Trust (HR) 30 Oct 242024 Q3 Earnings call transcript

Company Profile

Participants

Ronald Hubbard	executive
Todd Meredith	executive
Austen Helfrich	executive
Austin Wurschmidt	analyst
Juan Sanabria	analyst
William John Kilichowski	analyst
Michael Griffin	analyst
Richard Anderson	analyst
Jonathan Hughes	analyst
Michael Mueller	analyst
Emily Meckler	analyst
Nicholas Yulico	analyst
Robert Hull	executive

Call transcript

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Operator

Good morning. Thank you for attending the Healthcare Realty Third Quarter 2024 Earnings Conference Call. My name is Bridget, and I'll be your moderator for today. [Operator Instructions] I would now like to pass the conference over to our host, Ron Hubbard, Vice President of Investor Relations with Healthcare Realty. Thank you, Ron.

proceed. may You

Ronald Hubbard

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

Todd Meredith

today. with you, thank and everyone, you, Thank being for us Ron,

reported normalized I our us here Then strong results, start Q&A capital FFO Rob high through by Ryan key of the over are We the $X.XX available of had third allocation. Healthcare our for ], Austen and Investment a our me highlighting Realty operational share trends and call prepared Joining Officer; turn Operating at for quarterly Helfrich, to quarter. Officer. is leasin end Chief I'll expectations. Austen our and Chief metrics. to Crowley [ walk our will Interim Also CFO. with remarks Hull, per

With for strong outstripping pleased return space MOB to supply. we demand are with market growth. up results fundamentals outpatient these to X.X%, are year-over-year

basis point members X-quarter strong We aging leasing basis the high the occupancy on XXX care absorption, also is the strong their feet to we with pleased to advantage tremendous of of by was to shift to of secular multi-tenant producing of report expenses solid were goal. NOI new tailwinds lease spreads square of multi-tenant quarter from This gain are and year-over-year at our tailwinds team. cash team proud execution the of and XX%. published over bridge, go totaling feet retention benefited our tenant from to X.X%. X.X% points NOI the be same-store achieved for Future also occupancy in for or XXX X.X% feet third quarter occupancy continued XX leases our pace our growth benefiting management of settings. demographics down end commencing XXX,XXX over quarter backdrop, of of in outpatient basis were year-over-year. XXX,XXX escalators I'm portfolio. I'm fifth signed our in coupled another new XXX,XXX We are this property points. expense all square X.X%. commencements, driven over team quarter. of contractual With consecutive quarters. Taking last in delivered We've square of leasing with by This was same-store X gained program the growth our XXX leases of from also growth X

the high a we year-over-year on basis, years. steady to seeing of pattern we're last environment a more return quarter the fourth inflationary a versus the expect to expenses While normal increase several in expense

For quarter. total third was in properties, multi-tenant NOI X.X% the growth

quarter, had we to the realized were economics move-outs potential relative due significant timing move-ins. not the the versus full absorption later in Although of earlier

were pronounced usual uncommon, more this than While quarter. timing differences not are they

growth rent burns free as We accelerate timing differences to moderate NOI expect and off.

growth allocation. I'd I Healthcare align Before made year to weeks, recently to it's like operational briefly just increased our their changes brought These changes momentum growth of new changes. We turn the has In execution, first perspectives with invigorating build and Realty's the touch and more extend leadership of it further the intensity the been over, to capital operational success leadership will announced our on to on initiatives. focus team and the the to roles. fresh on XXXX and acceleration closely few accretive last our see

I'll it over Austen. Now turn to

Austen Helfrich

and you, Todd, everyone. morning, good Thank

Let by with that about start role and interim new working investor saying analyst community. as my I'm look and to CFO me excited the forward

$XXX weighted NAV. repurchases represents earnings, leverage-neutral year-to-date average the reinvestment million. accretive outcome Based cash with pleased to spread over October, a our this increasing ] of are success, to value created price X.XX and proceeds XXX million of a to $XXX this bringing nearly million totaled flow proceeds $XXX basis, range company are full this We on [ the basis contributions shares, highly for to at asset a Through year. a share year [indiscernible] through X.XX we points. JV sale and additional of $XX.XX. On

ample is [ currently look that market asset outpatient there third-party ] and a partnerships. sales joint has its HR we via business deep As and liquid market access medical to venture and ahead, for

will into in embedded We long-term returns valuation growth portfolio. framework the take dynamic will future a and own highest through our the target for risk-adjusted account which shareholders allocation capital always

repay quarter been used July October, term in asset EBITDA the this we unsecured adjusted to set proceeds debt mature Turning balance sales loan sheet. In XXXX. Including the end to to from We would debt X.Xx. to of have net fully repayment,

to move to growth. XXXX of lower end We in continued our the X.Xx expect by driven leverage at organic and XXXX decline to

high substantial almost XXX,XXX the $X.X at of of multi-tenant under risk-adjusted credit feet investing in end very had year-to-date, absorption the capital significant financial quarter, returns. we facility, With availability of of billion as we are new flexibility. Finally, square approximately providing leasing our

leasing activity As the is and a benefit. ratio timing Todd XXX% spend Due rent our capital in this NOI to mentioned, was beginning to from the payout corresponding produce cash new mismatch only between quarter. new leasing,

the to impact for approach of we adjusted absorption and would Excluding XXXX, course capital, ratio below been [indiscernible] Over our the ratio payout XXX% capital. XX% our absorption of payout have expect decline

on update like Steward to recent unfolding an real is we clarity. bankruptcy I'd time. days, Now provide in additional which process, gained have In the

XXX,XXX exposure is leases total Steward our $XX annual square million reminder, feet. a approximately of to NOI As across

visibility annual leases in and take new have with tenants with X, remaining or that new NOI NOI of on exposure. Medical Health. time includes for high and X/X well total million space. Backfilling as as assuming health loss operators accepted work program as partnerships. The leases. visibility near-term have build Brown out represents and new XXXX. or new quality upgrades represent where leases million this continue will of The do leases not Boston approximately were not by we of operators will new replacement with or This we nearly $XX to credit million secured November direct into begin space through have University in tenants and are will we These We NOI that our fantastic investment-grade annual Center system solid nonprofit $XX of $XX systems this

a of we with efforts. very annual still half are the it's NOI approximately through clarity long-term longer-term of diversification. our to over by NOI of to of While [ $XX X/X leasing summary, million NOI we Steward encouraged improved recover with recover the XX% ] credit almost tenant have early, the quality this and greatly opportunity In current on opportunity

Turning to guidance.

including $X.XX November Steward range and FFO that December impact per just have $X.XX, We XXXX the our to narrowed I normalized covered. share to from

capital well. back Operator? I business the questions. the core for is performance tailwinds is benefits absorption of many into conferences. With will including Our look to number it at of operator line performing that, open months X the I of now the you to accretive with extremely generating a turn forward over This to allocation. next meeting XXXX,

Operator

The KeyBanc from Markets. of The Yulico [Operator comes Scotiabank. line from the the Nick first question Capital next question of with Wurschmidt Instructions] comes line with Austin

Austin Wurschmidt

back just discussed. mentioned with you net goals understand something speak -- NOI what absorption if move-in, And kind your multi-tenant Todd, occupancy of dynamic about the growth kind and to and we're timing same-store go quarter. comment there I quarter kind and of I exceeding whether guess is you can this end just of or impact on this make the sure went average here? else to the you missing move-out guidance wanted that marry just difference a there's occupancy

Todd Meredith

good observation. Austin. Yes. Good question,

ended bit the of quarter then quarter we -- occupancy multi-tenant strongly September. We well. fair actually you in quarter think I a it where below in second we spent of rebounds the fair the hit finished we in it where spent portfolio bit a below third the and pretty sorry,

so there. point the as ended. below is was average really obviously, story the It And out, you where we well

more pickup for September, well that 'XX. saw in So really quarter, a fourth bodes strong importantly, we the but

that's thinking to have well. it also I but free that burning you've mentioned, how as terms You about which that's free not rent, obviously also the got line translates of FFO in rent something well as in off same-store,

really contribute cash the really perspective, 'XX. in of to a a what lot see early in we perhaps true So view from quarter, you third starting

Austin Wurschmidt

about drivers that more fact that revenue piece, and be X% and So increases cash the we think, be range, spreads to of the growth forward? leasing really base occupancy think moving in on contractual high the the in that I mid-X% should should just start really are other should you're then

Todd Meredith

I exactly well said. That's That's think -- that's right.

when that's inflection down, saw I thing, declining dragged you just a We've as think an thing other point good expenses. is reimbursements you're well. having of around had expenses Well, expenses. dynamic which the also the

fourth But and you So normalize overall to we'll we that little that's begin revenue a in forward. that. in the something to saw going quarter due think softness

correct So there. think rent, got I base you've

Austin Wurschmidt

sense And just expect I one million of of us of the that $XX leases space, said those then timing for, Steward for give you account On when a to on you'd you the X/X commence. the last backfilling NOI, can think me.

Austen Helfrich

Yes. million Steward the those we starting would end to the of at leases X commence the break with Austin, it's Austen. buckets, to expect timing. $XX up you lease that Maybe the referenced

obviously, then mismatch the And loop think just no you on to to there real timing about. that. close So of kind need that

impact new enter the to to leasing we're XXXX, I sure make space. pipeline. re-tenant want On NOI now of that will we mentioned. to there as just due that clear basically be be fourth going to timing work quarter the lag the $XX to thinking in when we Obviously, it's that do million about a

So leases, build space. we've got out new to negotiate

those clear be on to different just X So components.

Operator

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

Juan Sanabria

bit little or say. a on NOI, multi-tenant being Just brought but I on down, the same-store just guidance was curious that back thicker, brought I'm maybe why should

Todd Meredith

Yes.

I the would think, look you of lag guide Juan, really the really, then quarter, suggest about we difference in quarter. it's for just given line where and sort that fourth timing something quarter, or would if out at year-to-date -- you the fourth the the third had of just of we the before, just it out are think be expectation

to wanted we So of fourth quarter. relative seeing what we're in just sort to the rightsize that

So clearly, picking see acceleration have mentioned, effect. and rate on we I that as you -- up, still this it's lag growth just going

bring what year-to-date fourth where versus just sense we for really in quarter. are So line the with makes

Juan Sanabria

initially lease the would you than have later is starting hoped? So just

Todd Meredith

Not necessarily than move-outs. It's we of hoped. timing just

the to skewed really of beginning move-outs quarter. had the we So

of sort that experienced late a strong obviously, And very and coming a rebound positive, we but in of again, [indiscernible] intra-quarter. quarter September. that in lot really drag net then So the

every the had again, like that's we -- that to vary the going it's timing. just have same. can similar just this There prior So pronounced pattern a much -- is quarter-to-quarter muted not much quarter. It's differences. -- And but more quarter. on more timing It in this be was just can quarter

in So it obviously an quarter. has given a impact

Austen Helfrich

a significant have going increase Juan, the that rent flowing there's that rent in straight-line in some quarter and leases well the fourth differentiate of free fourth referenced Obviously, that is quarter. to I bit into September carryover story, to how benefit think be in you GAAP signed quarter. start Obviously, that different a caused cash NOI see absorption on really third that. to in as Todd through free through number. that will that's the the as going to the point rent we Obviously, impact FFO little

tease to well. want out I So nuance as just that

Juan Sanabria

could of came I tease we hoping the then that that? number you. normalized increase Got what drove then guess, calendar 'XX bit or you out expect should about that's or over? little And kind just And curious, down. as as a we out a G&A bigger in turning think higher a

Austen Helfrich

Juan. a great That's question, Yes.

look taken management you to of XXXX. primarily the result into control expense year-to-date, growth that's G&A at actions If our by

to base current I think inflation, point. here, it you about off for is normal we're modeling a think that And G&A XXXX. start our be reasonable you normal is to as wage a about inflation good going assume assumption jumping run thinking rate to more

Operator

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

William John Kilichowski

Maybe in the to capital the activity quarter. if we could turn just

debt You said $XXX the term you imply that on loan. of the assuming the you're repurchases? million paid your upside sort stock buybacks of disposition down does of And of rest further based about flat activity,

Austen Helfrich

Yes.

to have that million in unsecured I did July think the We matured an loan to decrease of to starting that down pay you are debt really $XXX XXXX that correct. of maturity. remaining would term eye

guidance as increased around to X.Xx. back guidance that gave year-end be the on as based think our proceeds we well the at I

calculations your is prepared debt now stress realm. mentioned point the that I would just right good. down in outpatient is are think disposition very medical would marry I to I in the that. One remarks liquidity market the market in pay and I on the thing say my that

will all remain we're And [indiscernible] to how about we available whether allocation we capital opportunities it's in the of we thinking options that have. the very about thinking flexible so us, will remain

William John Kilichowski

Okay.

with the that revolver, that that? action choice opportunities the like ] sounds is million it Or So X X roughly, for X of the $XXX other it's for there capital? [ best is

Austen Helfrich

No.

on revolver. thinking you are in As your far right down, the pay debt as

William John Kilichowski

there that? maybe next, then on a reserve there you quarter. And give $XX credit us Is loss in million was anything the could Okay.

Austen Helfrich

Houston. Yes, final the in related $XX to was mezz write-down million of credit loss the loan of a

for been ] We XXXX. income [ loan accruing that the mezz of have not first since any quarter

was to that we out actions final was that first NOI impairment a from holders. inherited, the perspective. that loan maturity really So and this loan had due by take an the made That HTA loan on nothing and lien to

William John Kilichowski

in you then And pipeline hits that terms lease put to the unique sort around and $XX final for pipeline process cadence leasing asset what new so up? DI typical an and just that new The Like it? hard walk through timing an sort last looks a of of of us just Okay. could entering NOI, me. that touring like frame one to the there normal it's million maybe is of time of

Todd Meredith

on good half say a lie what it Austen sort that ] it's would described it some the has [ and of at Austen it I and typically what think the of up looking recover I average, follows, space. But lease from touched call it, looks I opportunities million execution. John, as us half, a would like months takes distribution, on terms for a wide course of that in acuity really have. a Yes. for can and X to we're of described, months, very lease where I that Rob tour think, question. broadly. opportunities out the on we that opportunity to get $XX say build time normal but then vary few that And lot on the X of spaces the to to space. Obviously, average, depending a it's months about this

this the again, our frame some Obviously, to timing. I start million that impact early would in We're fourth you year, laid kicking for back about would So when the remainder in. in of in essentially continue 'XX in our at then quarter probably put end ones the that's just of $XX current is is out I the time estimate of that the heard saying And why Austen you guidance. partial a think talk which

have add Obviously, different which you kind of free can with rent, So a little a lot we're that how thinking of circumstances to it. that's could about bit.

a unique of by to So in [ think FFO why buildings, it now has But of hospital, portion again, Street of A+ very Green strong 'XX. a Florida great front flow that's space We're hospital for doesn't according on much that lot character a we're we're significant research. terms some saying a -- have we not in There's rated relative doing. of to the in that and very -- else it encouraged persists recovery really the door does everything through ] space. cash some the

very a to we're really chance with so a have that we operator new get coming meet that bullish create there And we have work and and tenants in in those -- demand.

And time So frame that it space. encouraging a of lot that up lease previously of lease. was just master multi-tenant again, but sort to signs,

So obviously, to multi-tenant. you're master from going a lease

Operator

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

Michael Griffin

push to a supply I'm a what rents have wondering from tenants or options leases greater to continued you've minimal you seems solid given or whether and ability like demand not if longer new noticed sign perspective? get

Todd Meredith

say, is This speaking, ] maybe, were and heard leasing jump very Todd, under can you're seeing gain. healthy. have distribution us that. I very this quarter, Rob, occupancy would really X.X we But you've emphasize on time, We cash a you in, too. and wide Obviously, healthy generally focused strong some as [ for spreads. at we're

you right some really out, supply. that's to being and occupancy. I do is be you're to really to just our think a So gaining is lot now ability initiative the limited just I push negotiation different to push on very you big position pointed as described, think term that price seeing not with strengthening, sensitive as of

backdrop, to But to we're to of on more plenty when activity little X% you occupancy, spreads. which more occupancy can doing, focus that it a cash alluded occupancy. here. we're think the in X% And we certainly continue encouraging in where can I I range, leasing look opportunity to on pushing examples So But see putting some typical you the our as of strength. volume a rate. improve We an But our show we're now, right remarks. you my is being the I turn very across again, end double-digit is high showed to of think getting

Michael Griffin

color And then the maybe there, Todd. front. the sort switching allocation of Appreciate just cap to

relative NAV discount you there's talked those little activity and at more from a job rates accretion capital have liquid pretty I this given done seeing or think of Have the a you buybacks of too on and far good to Austen, about execute with think probably so narrowing to limited juncture started guys those bit But year. deal narrow you today I acquisition share kind this of transaction some perspective a deals? your are where an open cost pickup is market. cap from to the

Austen Helfrich

Yes. That's great question. a Thanks, Michael.

As you had alluded highly been with have buybacks year-to-date. to, we're the accretive. Obviously, we've share really pleased activity the

I were than your ago. XX now we different outpatient market for the think point, right where to medical significantly is months

think the everyone it depth rates cap market. naturally of obviously, the knows, I market, the sellers as more as to improve, brings

allocation, capital of my back options terms look that thinking the In a vis-a-vis we really think point about dynamic to And framework. is available we're would go have around range I it we how I us. to that way of earlier at the

Michael. going comment, kind that So of start with I'll high-level

a IRR. You've square absorption we've about capital talked obviously year, significant is for which now, talked million -- shareholders. for It's we're the X.X very funding high absorption great incremental targets Obviously, feet. right the

compelling as would about what current that or myriad private us. available the future growth. we fee ability do to I rate of well valuations, think to portfolio reinvest believe other growth in to the own we of external What KKR of business, we the whether I venture, have our structure it's is into with for stress which options, is access market a have comes obviously terms that us, opportunities a

risk-adjusted based to across and and of available the highest capital continue will we available return. those all best on So look allocate

Operator

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

Richard Anderson

progress a you're style to Healthcare of occupancy making and we sort Todd, a focus phase this I'm you move you -- Might to of for about sort the bridge, communication rate there. next Realty. wondering next a year. On -- good similar expect referred perhaps

rates. to of well the goal end You've be communicating the lift there it What's about higher year. achieved a get to of kind you something or got willing perhaps the thought for because year? bridge or your future a a this occupancy seems process this ski worked reasonably Could for

Todd Meredith

was And to year right. basically obviously, time last [indiscernible] out this we it Right, expectations. some thought put

about call really talk seen always everybody we But for I goals say it you've expected us a we important. of detail X-quarter for which be guidance. transparent about our year, FFO would our will with our plan. starts off time, I and provide a components So do of FFO along lot next we occupancy, just long from what annual around plan, our an think was

We're time, and occupancy about So to we'll need always look in, type It's at be exactly clear of same diagram including each It's -- February. go will plan think metrics put out do we year. 'XX. we our we Austen thinking the getting expectations we're those into will out that what is, that to not things. be digging going lift and early. ski are X-quarter in is very for what certainly are. I'm abundantly team not clear The operating around now a for we're through bring we something I about and sure transparent but next will how

-- ]. leasing pace to we're think the [ XXX,XXX year new leasing record above really track [indiscernible] I keeping show up we good that some a this

we As gains, make a will quarter. story around continued you're to we're gains growth. for will versus in Absolutely. And we've said expectations be going absorption a describe delivering X communication I occupancy quarters. effort That each 'XX. rate it's that right, our now think to be occupancy Obviously,

still I lot in of think candid, a 'XX, just has to it. occupancy growth be

it following be focus on always rate that. continue of there. So it's will is as we picture, part year or the but [indiscernible] will whether big next out to the

very So ] [ transparent but 'XX really together yet. [indiscernible] put haven't be our we'll

Richard Anderson

even are of that despite you've conditioned we've of reducing some the a in anecdotal terms sense and of evidence higher this environment seen rate in more talked -- that for to -- higher them? years. still getting spreads. Or you they for about back, Do are rental pushing rate though tenants more sort though, environment

Todd Meredith

Sure.

time cyclical you matured has is I come medical others outpatient good that a moves. segment, maturity and sectors some when seen where I it's really of think certainly are longer you're much has kind of then of leasing do towards hallmarks this maybe business traditional along you that curve don't the kind think and more a like of this added those been think shifted maybe going other and have one more the down stability. incredible when capture things is where cash softer. I subsector just spreads of

So I steady think at that long-term and in see it's that not growth like differences numbers percent profile that and a range rock business. still in can the that frame. the very much solid we're in long over the X-plus year-over-year space about you behavioral things just any stability, time seeing look in employment

lot it with just supply drives up, do costs supply it. down, it think I way as construction give that of down as you're I Michael asked well right, limits costs a earlier, advantage. and I But does So think supply think with you financing

trends will look dynamics, it's -- But there more encouraging. cyclical be upside, suddenly partly maturation But the plus of of some to going think to other don't it's So the boom I the think we're I subsector. like bust very those sectors. positive the of because

quick one to I of just year. clusters increase thing is I I take spread to strong that really think is where obviously, in don't what towards maximize. One lose systems, something retention also markets had lose sight rate health our and terms to puck the growth, thing want think of -- the to we've the sorry, advantage demographic hop in pricing and using power and our in that -- strategy of in we the is move and this want going strategies cash leasing is to discussion don't

So it. to multiple at spread. I levers question, cash to leasing to have look not just think question, do you that that There are

absorption. capital I retention, we about as benefit standpoint, a obviously, think versus new leasing increasing enormous think from

of that wanted a So we're I there it's in looking how not business, that there of levers there at bit supply/demand add not -- and I dynamic that, is impacts leasing just terms are simply multiple gauges -- too. cash think -- spread. to the

question? The Okay.

Richard Anderson

future Second multiple of sort question talked is you growth. avenues about to

for just perhaps is asset below stock estimates value. Your consensus now least net a at hair

So plan selling and the from pivot are back to buy we previous into with buybacks could sell JVs schedule assets less I alongside moving into the a stock? or vis-a-vis how them and quickly maybe you're mean and where with previous that away them? the evolve

Todd Meredith

range just concept we'll and lies. a reached on Rich, taking saying, of you're than activities close would start those oh, then think are where said, for view that's a that's more hear -- fee a from we're of just double-digit and more a capital properties, certain do a taking see can competing Yes. -- things. accretively we JV moving going -- much development returns dynamic where returns I more has can balancing a number, lease-up that start just at consensus static view. framework we specifically, redevelopment Obviously, in. maybe to the our that all sort absorption. say all dynamic capital where we that things. But price may of got let think ranges and as against, own it's I and of than that But oh, high we change much those we've overarching Absolutely, rather opportunity that's more to a very program that Austen think we've I or you're type us stop going the comment it's forward we've across advantageous. into on different into this. jump saying, do pivot We'll one looking and I'll look structure right, more but a We're often hit whether much a is it's of I we be where dynamic Austin a allocate heavily basis, depending

the we repurchase look those as So idea stock Obviously, all things. at well.

anything So there. add sorry you to have if Austen,

Austen Helfrich

No, think that's I great.

Richard Anderson

and the what Last much of be perhaps you what company like a are changes much that perspective. other like question will that of on me words, of fresh all strategic in them basis? How more been Todd, a the changes the is communicative. management with intentions will how these underway or completed are mentioned terms looks for change have management the be and changes ahead and other In of go-forward

Todd Meredith

Sure. overly I don't think it's complicated.

even think we investments. in Rob Rob, his Chief Operating the put That I main his -- into really simply case was spending leasing. of really is the around title it's just role. his was focus time Officer on who though

that's he's And more serving what and so a that Rob's role around been but leadership really his focused it aligning leadership on, definitive was and we're importantly, his having in really responsibilities. title his And just where going. clear and

long role. our a just been the you see a very [indiscernible] I Officer time, who's clearly Chief involved JV that allocation as the been space long lot He's lead. great growth. deeply he side, -- lots He's high a putting focus on elevating Rob Investment So position, with well the been growth us deep done. And operational in quite deals year. And will clearly to capital that's from knows Ryan transactions, a then really as time, team this around our of to guy into which for a this to whole of think the get will continue driving parties

we that we're the the Healthcare a can Realty really think We really to the care we want that the really him strategic to getting charge disposition leading really only attracting there but efforts taking then just leadership the strategy, retaining JV team. And on elevate table in always health really improve with and in not me, and Julie and or talent really bring So also some but human organization. acquisitions best best-in-class development, to excuse resource role, that to redevelopment, talent. and around administrative his and seat clear good,

So of is those are of key it communication. And then the Austen, things. some part

outpatient also about the a very brings ability over think that we're really to I style he perspective can has of think our to we around focused. brings shifts CFO think a I I Austen perspective, brought talking, longtime course things different role a the buy-side rigor predict growth in. former medical this of communication still Rich, improve don't view. But do future. more business but very the we're also, will we're how as all the transformational from guy, team away different of much drive a and

strategic, And oriented changing operational and than rather it's but more would say so it business. much is completely I the focus

Operator

the from Hughes of comes Raymond Jonathan question next with The line James.

Jonathan Hughes

catch-up I treated month NOI second you Steward, impact hoping XQ Will quarter? be will this the in received how that rent be excluded multi-tenant negative as clarify out in left this With growth. was Massachusetts the could think

Austen Helfrich

Jonathan. question, good Really

fourth do I'll Let quarter. kind me perspective, your Steward question. release to positive answer reserve overall from it of in and drill specific to have then We a a the related to expect down

from the the $X.X about you in related probably Jonathan referenced, to sorry, in and Brown second -- fourth under would You're Health. What on the the BMC is dynamic the a talking or payments I you I at say share. just or million quarter, we FFO University include those look don't on against did specific negative same-store per giving probably have both. of answer will impact cash number, you for reserves the exclude something

Todd Meredith

to the going Yes, we're around portfolio bigger the a question I how in fourth probably honestly, some think on of obviously core vis-a-vis comment. show performance of fair a that's the [indiscernible] the quarter it's Jonathan,

very we Florida, the catch-up said is recap in I this would way. earlier, to treat would extent we payments it to same mean we I think [indiscernible] what just I the much I live. had say

Jonathan Hughes

one to have about forward hearing look So that. more [indiscernible] I just more.

just dividend, time first the you the yesterday for did declared really I and On last know mentioned it quarter. was

my guess question looking the why at I change now [Audio Gap] So you're is

Todd Meredith

Is [Audio make different It And we this it a state, that it's [Audio on X show the headed. be a sustainable our and are absolutely, is the math, based look were you a this forward Gap] framework. lot we're dividend. show the numbers calculation the idea. divide or sustainable, sense. can would headed steady if we very looking that where we a at of just is wouldn't Obviously, in Gap] belief

So I in people to trying just see Is better that view helpful. what we is the where future. that think going our understand help

Jonathan Hughes

[Audio Gap]

Unknown Executive

close a lease Okay. leasing. lease a that term that all NOI foot to year. Talking you leases as of $XX, get of result get about come more $X and the per will Take new average

Operator

comes [Audio Gap] question The next

Unknown Analyst

bit [Audio talk Gap] you to of just that. kind I could a building wanted eventually to about that like little get long the

Todd Meredith

runway occupancy continue driving have merger higher. can't saw long post but you seeing our we that occupancy forever, that. to you're Gap] a [Audio multi-tenant And game

growth because especially to we in at you point. same-store in can seeing rate we're what think level -- growth, of growth -- improvement to level talking February. that's all starting the that's gain that have occupancy occupancy 'XX to is, of levels terms not some the time that absorption at do of it's converting yes, view guidance that you at But you concept that much and that normalize seeing But XXXX. And And spending through we're obviously, come maybe kicking long-term we're is occupancy exactly actual in a forever net less, higher a same-store see not of when gains. point, path You're begin here look in what multiyear lot an any, all occupancy have that our will towards about a hey, We'll if and and year. growth great this as we putting be it's rate concept. to for out this

So it based that and good that the are fundamentals, post in accelerate cash leasing gain to that very normal is expense escalators addition an see the underlying are in sort growth the rent to strong spreads occupancy so of neighborhood on management, forth, fundamentals. high opportunity other all which we of

fundamentals answer normal the it's So gain the occupancy is short plus question. your to

Unknown Analyst

today, on on you guess I do of a That's capital mean, of development made all of of appreciate uses earlier today about just of versus allocate think most And stock the versus How capital of uses? where around the when versus alternative would other kind value? helpful. think the use create capital buyback And those best capital. that kind you're comments of second it Again, kind accretion ranking acquisitions kind you about really I then earning or you potential I do some kind maybe based question of kind would shareholder allocation.

Austen Helfrich

to, some go to to this we back It's answer is best probably the have that Austen. earlier I us. to available way mentioned I'll go to think, I just back of the that opportunities

think, absorption ordering, I you're about rank place talking capital. the to has start to #X Tayo, obviously, if be

us TI renewal rate or best targeting the the building far today. capital, LCs through leasing higher return available and be that new absorption, and whether the to on we get is Just returns that by

of I options basis market, in consider, points stock price. Number a two, are number remaining you you liquid a which is deep private about and to have think in is there's I valuations a the go XX, most as market. talked through XX of the factors importantly, where weeks. couple our where one,

paying we're all of obviously, that. attention So to

gave bit You've can we've seen year-to-date referenced price, which is. reinvestment I earlier view my sense I our what you the of done the at what some that spread through share into allocation, and capital a little $XX.XX give also on average

think, have can triangulate my that, we're of we in to from of thoughts. But all terms So here, think I those you would capital. message I to do access what going help good be, to

order accretively the We a how lot far of any that as factors given myriad those the of have opportunity at time. depends redeploy rank It other of we'll on internally. And to as all options. kind

Unknown Analyst

more. one me indulge just Then helpful. That's

of maturity we XXXX Just well kind kind upcoming and even of of rising, swap as possibly in in terms how as 'XX. certain debt and about rates do think expiration

Austen Helfrich

as XXXX, Todd. question, is great of term start a that it. a $XXX million to such 'XX asking great our off for we maturities. pay loan look Thanks sure That's Obviously, on unsecured

are unsecured is the Our next unsecured maturity due the in that May. -- $XXX of bonds million

obviously, back bring that of is of to I and #X got the we the do some year, X.Xx to our opportunity are pay think leverage to end down to by the question the revolver. to more debt that I the earlier looking around debt paydown,

revolver, say, terms may options 'XX point, environment your Tayo, enter to the look that and additional we unsecured us expect capacity do which 'XX would on rate unsecured for great to gives maturity. flexibility we at with current the that So in of maturity. I

We XXXX. From think remainder XXXX. in loans unswapped will where our for in be that. at into how out. swap going that very million opportunistic of because have will near a great a news expirations think is And we look But fluid term to swap of the the starts of I flexibility in perspective, it's we term revolver we great a have be of lot continue outstanding. and the do do us really call $XX I our

So question, it's Tayo, about. maximum then obviously, through And reference we trying heading an intent set up We're did delever to thinking a are ourselves for 'XX. 'XX. I into continue to flexibility all great actively something to

on, appreciate So we're it's something Thank you. focused very I and the question.

Operator

line the JPMorgan. Mike with Mueller from comes of question next The

Michael Mueller

buildings? from issues you're more why you else? just help quick above rents market I Steward? on certain question color a it little the you guess of that remaining $X Is million just Can $XX of recapturing Is million in something it one put first. Can with context? or kind give

Todd Meredith

Mike. Sure. Good question,

dynamics core million. whole think going is I the the got, you XX answer number that We've what, buildings simply a $XX for on. have Steward of exposure across

so sorry, And to from in to you're cases. going -- many multi-tenant from single-tenant multi-tenant

a factor, you have about modeling standpoint. think will, vacancy a difference clearly from you're going you to So if general that in if some

[ to is expectation right And assets. about multiple XXX back our So ]. go that can across

are that assumed in of rate and backfill a We've as differences conservatively that may our sort part here of some we there So there -- it's small see. well.

low a exposure. where have didn't an are one-for-one sale. of we're having of closed Massachusetts in some sales You positive you a expectations assets, least But also probably not to conversations much probably going campuses couple actually replacing frankly, basis with is where NOI that had happen lot a have but per you're we through those at those the or long term, se asset there on

get building that think that in we're and to be So we We modeling realistically, but we're time what in. sure do about out, that exactly things play will there's and some and the now a how trying people just standpoint know can factoring to we of very and conservative back expectations. can from for that frame assume don't think

Michael Mueller

Got it.

you do on what based the net a won't what that next you Okay. year? And I be you think see today, then is again seller guess, likelihood

Todd Meredith

capital The to goes broad where we're allocation. Austen capital probably some going was point again needs have a this question, commit back sense. be to We through at to venue. on we're a Again, Mike. clearly each opportunistic. to year that not It's to in obviously, going That just rank where lines fund a acquisitions But up order on pivot JV. a to

we that. come that where things are with look, we So the all today,

So like. looks not 'XX what we really committing think to

the pricing encouraged proceeds. I about out our and generate ability think, generally, on that the liquidity market pointed there, attractive to MOB the as we're access to Austen and

we'll refine So early as in guidance we obviously that 'XX. provide

Operator

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

Emily Meckler

I quick first question just on generation the have a PI.

from increase what of previous million. causing So the million $XX the is $XX expectation

Austen Helfrich

we've know absorption Emily, it's anything if part absorption. other is and think it just that the parcel with the really answer the simple I that just more year-to-date there's done is. Austen. The to don't than complicated where -- I and

Emily Meckler

then one move-out. And more on Okay.

are year, expirations any will occupancy? skewer, later move-outs So outside known on of in lease that upcoming this temporary there yearly to drag lead next a

Austen Helfrich

think out to call don't No, at I time, this anything Emily.

Operator

Nick question . The Yulico comes line with from of the next Scotiabank.

Nicholas Yulico

for the technical difficulties earlier. Sorry

how like just terms could CapEx of it that as year? percentage expenditures, us of the capital a In a than in about recent normal maintenance you higher Are on quarters that impact right next give they've next of think come now, as of NOI year? a a trended down running NOI. Can you feel bit percentage for down kind still to

Austen Helfrich

is I'm we're obviously, going tied I targets that I'll next year. context but of little would to here, be just until provide into a going think absorption bit for our save that XXXX I guidance -- February. to say

Todd I to be team optimistic the be think So into. around grow optimistic dive occupancy you've continuing and heard

But you've look a think within I think seen it's tied to real generally, as the on be you as efficiency to well. absorption. capital focus I going building forward,

[indiscernible] absorption So drive of we continue as absorption. that to

impact why it is Gap] so are which term, near disproportional And to trying a [Audio the in is we

Nicholas Yulico

XX just Is roughly is about last absorption, quarters. thinking there anything of there forward, of Gap] we're going points -- the been some You've kind as [Audio getting Gap] X on [Audio basis

Todd Meredith

here, high can we that expectations on we've Rob not anything, if but much think, had put that. I to sustain too pressure

can In focus. we fact, how really that is elevate the

very bullish volume of work done, drive at that And but leasing trying demand. hard to new is we're so on the team

Robert Hull

to just to XXs. that, add that mid- And high I Gap] think [Audio I'll

didn't [Audio our but leasing certainly, backfill pace so a on. that, been only new And required we've absorption that's Gap] hit not to the is targets

Operator

[Audio would like There are at this time. additional to no questions I waiting Gap]

Todd Meredith

Gap] [Audio

Operator

the for you rest enjoy participation, the your Thank and of day.

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