HR - Earnings call transcript Q4 2024 | Healthcare Realty Trust Incorporated

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Operator

Thank you for standing by. My name is Karen, and I will be your conference operator today. At this time, I would like to welcome everyone to the Healthcare Realty Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions].

the Relations. to turn President Hubbard, now Investor of will call Ron over Vice I ahead. go Please

Ronald Hubbard

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

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

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

Moore. CEO, now I'd our to like to turn Connie over President and the Interim call

Constance Moore

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

Officer. Crowley, Austen remarks questions Investment us our for our for me and Chief Chief with Ryan is Operating our answers prepared our here Chief and is and Financial Also Joining Hull, Helfrich, Officer; Officer. Rob available

my with since promoted Helfrich deep of call affiliated of and of been Since Glenn made and the Don We X the into Dave after middle Officer. experience. current member last industry Bohjalian Tom Financial as directors Henry, many board As XXXX role and Chief as you President new to of and elevated I've Rufrano We company CEO, Austen shortly stepped Interim our management with we the appointed to Directors. I meaningful Board a Independent and Chair. Healthcare independent leadership know, several changes. and existing director, Wood Realty

leadership to involved renewed I've team intensity. operations, and Healthcare I Realty, outlining we new become capital my vigor XXXX Coupled executive a role to directly allocation our opportunity our announced and leadership in with September, the with appointments had In that share fresh our in our strategic priorities. executing perspective, am pleased other at has is decisions,

than on the to management these to accelerated position ever confident has and do I'm deliver competitive that an management to enhancements, HR more basis. value With team, portfolio so and shareholders incremental

a Moving the capital to 'XX to increase aggressively leasing laid plan year. results. our and during momentum recycle We occupancy and out

the per fourth X.X% share FFO represents normalized at Our $X.XX quarter end in year-over-year growth. of was we high the range the and provided

achieved new lease all-time the XXX,XXX fourth and square also both million feet We X feet records. year, nearly square quarter for the commitments of in

We portfolio. a we had gains do. end multi-tenant basis would at high For delivering points XXX occupancy plan. the of to our points in the did finished we occupancy projected XXX the said we We year what absorption, XXX of

by our efficiency. reduced on continued to We controllable points. expenses also efforts focus We operational operating basis XXX

billion year, the a accretively capital raise limited $X.X were repurchased in allocation during proceeds asset upside. noncore including shares of and proceeds had at was generated significant discount. sales to that $XXX million nearly We XXXX Our that plan trading

at million million of monetize $X.X We X.Xx with leverage-neutral partners, repurchases, joint venture leverage, forecasted we expanded the to of the year strong leverage an call. also below allocated a the with and assets. largely capital Along repurchase on $XXX basis. billion KKR X.Xx new the These last XX through million repaid on a and share platform raised $XXX also ended we leading have ventures Nuveen. to joint We institutional been source shares our debt stabilized

forward 'XX. Looking to

Our momentum operating end to our asset the XXXX refining growth, stronger markets of and finally, this it's operational the focus process, two, and for with be strategic position long-term the will a modest cost to priority drive growth. portfolio and a focused range. allocation one, portfolio deleveraging on significant With to right long-term towards the through we on: repayment proceeds to NOI growth efficiencies; a debt and deleveraging continuing focused of there priorities Combined our capital our reduction. on We our earnings maximize allocate strategy is operational growth; densest will our and fastest-growing natural process sales HR are in lower believe debt-to-EBITDA near-term and headwind. low capital debt

my a the our CEO identifying tenure would further board strategic the to committed team, December on and been Before search update process and would and priorities. CEO an want permanent over temporary, I to turn has call since communicated was the underway a I rest be began of role, firm. with advance When the provide committee search the to Board's executive I assumed underway interim I the was The the who established leading search.

that ensure not the will We right rush process leader the selected. to is

with market turn cover operations then and guidance. the going more fundamentals. with will results to financial to call to that, details Rob on for over our finish Austen XXXX our So I'm

Robert Hull

continue starts into combined, tailwinds. tailwinds levels fourth with portfolio. long-term in tenants, for the the decade. systems our shift estate, I'd at need-based in results Supply care we're health country's of like outpatient seeing long-term be The settings. to lowest demographic secular put our patient building these from and biggest outpatient trends our quarter and property one take industry. offering constrained remains of a care deliveries in lower-cost construction space the benefits a All largest continues for is powerful most Meanwhile, to steady Connie. Demand moment medical trends to the Thanks, context produce the sectors in real growth. the to durable

strong over had focus to COO October took robust in topping was on of of absorption absorption quarter efficiencies. tremendous further objective signed year, year We were operating signed continue last new the a a quarter. and Healthcare I an of of square the to driving achieved million fourth fourth as When We activity which leases, the for off momentum saw feet square leasing finished and almost of my we Realty. with all-time feet year leasing and XXX,XXX X quarterly nearly high during

square was retained year, year. On totaling Of leases sector. XXX these, we the for were commenced during feet of more commencements, tenants XXXX. and fourth lease million million leases points expiring X,XXX over quarter. XXX X.X the compared MOB during renewal from tenant up This retention, new best-in-class basis And than across XX.X% for activity commenced the to square feet X.X the

during and of ago. the the was fourth our As for been for evidenced, quarter vacant than points the XX% of higher percentage points strong XXX year. we year end space expectations past XXXX absorption Coupled gains over tenant quarters, as commencements basis multi-tenant our provided at X Multi-tenant nearly has basis generated retention, a of high with of a occupancy our rate new peers. lease XX the

reduction X% year. Moving with to the we expenses. I controllable realized in pleased am expenses last

firing coming XXXX tightly in operations we to years. manage team implement short, is all initiatives will will on our drive operating new as In that in these team cylinders. continue the Our efficiencies

tenant are day-to-day relationships best-in-class leasing scale, and larger Our execution performance. model, driving

At want you thank a to moment year. this dedication effort for to team time, entire take tremendous to I and say their past my this

the momentum and the We to are by strong. into is XXXX for the poised results coming carry The outlook energized year.

care and over XXX our This good Our the into signed of the non-occupied and cost strong of represented absorption quarter margins lease roughly confident the year. is basis points in to our the health the year-end I XX% on shift lowest operating the at visibility continue ongoing with for we'll occupancy from coming points pipeline we across XX% in XX sum, third retention additional outpatient can portion range. year improving growing year tenant by of represent the or for system am driven maintaining a snow another basis performance. focus partners deliver Also, top-rated to And to high In up setting. provides portfolio. expectations providing lease pipeline,

on laser-focused growth. maximize NOI driving gains occupancy is team Our to further

turn to now call will Austen. I the over

Austen Helfrich

is growth. year-over-year Fourth per FFO was Rob. normalized end X.X% share quarter high the of represents which at $X.XX, Thanks, guidance and prior our

year, full normalized high the was FFO the per $X.XX, For range. again at revised share of our end

fourth was X.X% the quarter cash in fourth highlighted mentioned, quarter the Rob year. for robust and for As the the growth and X.X% strong portfolio. absorption core growth NOI was Same-store by

generated million we and full $X.X X.X% the Steward more Health Medical to EBITDA, share But cash the year. XXXX. fourth executed million from debt $XXX NOI Prospect moment. and these same-store $XXX and over and I'll a third excluding detail the in year in billion for in year-end capital was flat On X.X% ending allocation, for XXXX in down, bankruptcies, quarter proceeds debt in in discuss quarter and end nearly net at pay the to X.Xx repurchases of at the X.Xx down

full update Health Steward and We supplemental. Medical our in on provided a Prospect

However, here. I'll make a few comments brief

expect leases to has $XX million total now Of we trending call, Longer report previously team the already revenue, on square outlined I'm we secured still XX% pre-bankruptcy our in last Steward. on anticipated. than pre-bankruptcy our have to recover over our made original progress we of over Steward I exposure in that First, term, Steward of the $XX addressing we have that in better total XX% million NOI. pleased significant footage. place

Chapter In filed January of Medical for Prospect bankruptcy. this year, XX

Prospect X We with The Connecticut have Prospect of leases existing exposure where Medical tenancy. the across on in in total buildings is revenue is, feet square average, majority Prospect million. Hartford, $X.X of of exposure our multi-tenant approximately half buildings with vast XX,XXX of about the area,

currently in buildings. to square of similar materially buildings All other Prospect's are and tenants foot rent fully leased these is per the

Prospect information, have Although and no process we from in XXXX assume our chosen the bankruptcy it's to early revenue have limited we guidance. in

and order removed have the from provided core the of light into the Prospect, specific been to better provide in Steward XXXX same-store I in In visibility that these just portfolio. guidance on guidance

Today, health some bankruptcy affiliated our events percent Let the total as Premerger, per portfolio of rated a reserves X% averaged is year. me revenue into our of recent than less noncredit perspective. than put basis systems. of with less points XX total

and outlook. our capital our to financial turn priorities now XXXX I'll

First, to best-in-class capitalize we our on leasing momentum. will continue

As in fourth X.XX%. both and quarter. momentum strong of NOI Rob XXXX all-time we growth absorption in entered same-store same-store basis X% to to guiding between are high and in with new XXX leases and We leases signed points discussed, had an the commenced XX

$XXX during Second, million portfolio noncore of initial XXXX. we with sales to million $XXX of continued refinement will guidance prioritize asset

rest the sense the The the than at have in a portfolio with XXX markets basis growth, less we of of are in portfolio you give are refinement our margins and X.X% where that are me about below operating average. with points comparatively our work. Let locations dispositions targeted scale population approximately slower properties

of proceeds capital, we about continue from As these which absorption. XXXX, think sales leasing use our is driving prioritize we to for will

be and leasing address will debt the as the near-term XXXX This serve an extending investment into by reinvestment to extremely balance debt. to proceeds incremental return targeted sheet primary will X.XXx reducing the XXXX and reinvestment the of outstanding maturities. simultaneous be leverage of year-end of reduce leverage. duration goals this is high continue well have focus We X proactively back a of After earnings This our as capital, priority. on funding to will a to to

value unlocking continued and naturally reduce than same-store flow will year, in focus same-store exposure expirations, coupled growth from lease approximately to gains comparable improvements in decline producing total This portfolio XXXX our our with while in XXXX. a XX% are cash retention tenant This or to down better Finally, costs expirations XXXX. levels. absorption leasing key is through

lower on Our or of goal contribute 'XX. in lease NOI coupled expected 'XX capital should schedule the efficiency, to dividend achieving of with fourth quarter early full our and coverage growth focus expiration

Let me close out notes. XXXX guidance additional by providing X

is our year on achieving full First, our goals. in focus XXXX

or significant not additional as providing to will timing. address but guidance, quarterly be we transaction such, seasonality necessary provide we'll quarterly As commentary

to share be lowest to seasonality, quarter expect a of per quarter typical first FFO As you due reminder, our should the the year.

year benefits several first Additionally, as same-store should the snow comp growth be has southeast below that is a the as full this you due quarter expect year, the tax NOI difficult NOI for 'XX including property hit to winter onetime significant events. same-store growth well in Thus, XQ to our weather trend.

simplicity operating and of same-store on going for metrics comparability portfolio the will forward, consolidated we Second, our financial the and focus company. and guidance

providing XXXX of for for plan completion have metrics We similar do the on multi-tenant not provided fourth growth results, in quarter but rates XXXX.

You can supplemental. year are ranges guidance and full see our

closing I'll for back now it turn Connie remarks. to

Constance Moore

consistently incredibly upside. Realty Healthcare with growing business Austen. has embedded an occupancy steady, Thanks,

priorities Healthcare focused and We our strategic short, enhance shareholder excited on value. executing we're Realty. of the are to future about In

it turn for want Realty organization. welcoming only all I to but also It extraordinary Before their I team over members Healthcare been the for thank me to has year to accomplishments a the privilege into personally not Q&A, serve. last

Karen, answers. we're now for and ready question

Operator

I [Operator a to question. time, like in order ask this would At welcome to Instructions]. everyone

first Your Wurschmidt from from Austin question KeyBanc Markets. comes Capital

Austin Wurschmidt

the morning, kind everyone. in Good to the of the basis And snow re-leasing that is I'm points incremental same-store could the includes you that was Steward absorption? of same any hoping assumed some space? what's break what curious this achieve lines, backfilling space And leasing related to Steward you new of pipeline that leasing, net I the then XX absorption to not then out achieved? quarter that that along of guidance if of XXX

Robert Hull

Hi chime a we the treated leasing, I'll Austen But Austin, bulk we re-leasing as of which this new Steward big start leases, and the those is to in. maybe direct is Rob. renewals. the can activity, subtenant on treated

of but that in So our Steward leasing those feet of new related new was buildings, those There net about almost square is the XXX,XXX were square feet. quarter lease XX,XXX to leases. number in none of fourth activity new

related repeat other And next your then same-store can growth in year? you question to

Austin Wurschmidt

points Steward to lease-up of any understand some this got the reach absorption expected snow space the much the any as kind of new Yes. basis incremental as to year pipeline. guidance, there's of XX well need absorption to from Trying XXX how Steward to net leasing of expansion what's in you recognizing the included if the you've -- that achieve

Austen Helfrich

-- the Austin, first here on in I'll chime question. for

Steward. what target quarter, include for is absorption in similar the to year discussed does Our fourth next Rob not

is overlap flat year-over-year. Steward commencement I would XXXX, lease What Rob So we're front snow for our also which achieving on what between essentially there's new pipeline, absorption on say no XXXX. for is and targets the referenced the

commencements 'XX, So our that similar the new it seeing through I expiration implying you're benefit we've commencement are given, having of what really lease think generally from there less if a take the retention and in we're versus you and run lower expirations. standpoint, 'XX

Operator

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

Juan Sanabria

then the it FFO bit you latest normalized hoping for was the Fed of to you I the about -- expect that, be quarter could little part and 'XX or talk I thoughts on just expectations to into kind you'd a 'XX. dividend, covered as relates fourth guidance. And by know of said

thoughts So is that? or that year later maybe the XXX% a latest a about dividend the is cut table last that talked around just off was

Constance Moore

of operation pretty the end moment year, next dividend, Juan, talked about into given dividend we've this is we're by this the we as Connie. about last just late the and the our and talked is that grow year we leasing have year. what we confident will efficiency Well, that or that that

on is from so strategy leasing a really the deleveraging that now the right sort activity that's our natural dividend. of focused and got we've And

Juan Sanabria

FAD range was to normalize numbers, relative or FFO? about think payout the At to guidance that

Austen Helfrich

Yes.

you, if what you coverage we bridge question are Is next the maintenance combined look you that FFO which answering question will your I Juan, at by is core we've guidance that how think is, I share, your think am the of with I that to quarter. expirations what level and those sort in I per think, -- fourth to that, through there? the getting growth provided, talked of capital the about year, about expirations and

Juan Sanabria

Sort yes. you. of, Thank

Constance Moore

really because the have too, early we'll but be the towards of TI, FAD accelerates, will I leasing depend on that's end does think, decision, and will depends our if really that -- adjusted sort mean or it that tail I so it's more be leasing why because 'XX it right activity. and Well, really 'XX of

Operator

question comes next Citigroup. Your Nick from Joseph from

Nicholas Joseph

and timing not we curious CEO that's sense. the process the which where announcement? process to of the mentioned, it, an and are just in rush obviously, But you ongoing Connie, makes wanting expectations,

Constance Moore

together We -- CEO really of I The in is in starting a tough magnitude their we the CEO. the be I committee wish a earnest but to talking a the particularly Vegas. I about thoughts got search you. search the really think and on started talked about in end for expectations had time Well, Las and year December, search, of

So it really started in January.

So sitting in. today, days we're here at about XX

am Bohjalian to X to that doesn't So months, hoping used I it I certainly were think Tom Vegas, take long. in X when that Las we say

I working when be this like I shoes will about on. that been But like got committee I they've permanent think expectations a will aggressively. I have needs this say that their But And CEO. say, done. to company don't very running has

expect and a just we'll I have soon, make an so -- can't that really we -- right. give sure one to but I date I because it's just I it's that And position, important want

Nicholas Joseph

it. Appreciate from property to sense. some just anything And is Washington, sectors. changing could direct in downstream changes are in an to more obviously, makes Washington other your have maybe in tenants? a that probably But That there's some impacts perspective, things then MOB back there

Austen Helfrich

I what's you, Washington. watching out we're coming similar think of to

we of difficult think will a in for have what decide new good administration I say statement health be ultimately terms would care. to the a feeling it that

I think it's obviously, a speculate. early little to

continues we setting Rob right space And demand robust. believe, of to -- the the care. cost be do be remains What continue to that outpatient we as health now lowest mentioned, outpatient system for an

natural the of we extent the that. to cost, So administration beneficiary the lower are wants to

this of candidly, on too at it's just specifics administration, the to speculate out to think say. any I early point

Constance Moore

of time in spend Washington, team legal front just But Yes. and in Ryan legislators. our staying

the clear benefits of about MOB they're the So space.

Operator

Anderson from Rich next from Wedbush. comes Your question

Richard Anderson

you also we'll won't question see. but me ask a on the answer, Let perhaps CEO

thoughts that for may a topics naturally around it wondering if around decision made specific plan her company. out come all want a candidate big just You've headwind find to or in wondering to a stake path through big, own made? on if ground I'm game with lot dividend, the around forward harder very the I'm strategy. laid on decisions important the sort at And already that people, his is of those of that -- the has a

Constance Moore

we I think people have new is I at a of no of see opportunity say, terms have in understand and so strategy they team, Right. would not any anyone tell. all. that. new we're of strategy. question. coming think with, evaluate cows the But the a to and we people talking our here that Well, a really think sacred and Rich, all I to this, we will hindrance good committee on has time quality decisions really met both first is here, the that no, extraordinary. evaluate all, But The there no, that the that people We to that believe are do the going it's CEO the is good search very But of that been has clear CEO any in to it

So no.

Richard Anderson

not by that. surprised I'm

wondering if Okay, thanks very that in for sort doesn't that sitting I'm of your inflation Connie. terms The some sort of we've something way you an one you're that medical of a is me. success rub finding inflationary a And with? sense growth seen over environment. Is the it any conversations in asset greater in then well maybe CPI classes. can just much to rent that deploy to a in get Rob, office degree and spread into other there's for quick against of

Robert Hull

ago. local, type with an process I our introduced call a data discussions say It's informed leasing by leasing dynamic what IRR-based the submarket Rich, about guideline really it's model. and would that and we Yes, year our starts we

-- a out on And there looking our that. deals, If opportunity they're for lease-by-lease they're new rents, basis. inform will our teams the whenever to renewing them push so or going of model going arises

is the that goal lease, highest achieve or whether it's to on And IRR lease. a new they a real renewal

spread our we spreads that way we renewals cases, guide you leasing supplemental the that look some that's like. our And put see the in so terms and in the where in our what of can decisions. And

sometimes And -- of spreads, leasing situations, get them can some often out high right? the you factors cash supply-demand work

is may the and the lower team space. by our spread produce cases, leasing other that an avoid cash IRR driven downtime of expensive but In costly retenanting a

renewals to that we the we'll factor to our that and we're portfolio, we that's so, can our And arises and and do certainly new the making. So decision we'll way in where leasing do that the when approaching that continue into will. push our rents, opportunity

Constance Moore

But you are bumped. getting

Robert Hull

good Yes. That a is point.

escalators -- all we cases, in are -- X% plus our getting in are that of are all are deals. we We

portfolio solid And that long-term moving so view really, I growth for forward. that's embedded the as

very So space. stable supports it -- the flow a a very stable in cash MOB

Operator

Wells question John Fargo. next Your comes from from Kilichowski

William John Kilichowski

of may CapEx termination if of to kind like $XXX then go? over, I the first ReDev of of guide. sales term focus, fees million. asset have those sort And be the the and recycling activity versus bifurcate left your what's balance comments implied those Maybe million what looks the $XXX million help Could loans JVs where your do to on and capital them? the of $XXX what early target? would $XXX and sheet any but to what's it's 'XX Initially, of Maybe go associated capital dispositions seems that's Austen, to it's are and could on then kind then million it back about kind you with

Austen Helfrich

Yes.

I all of Let me sure make those questions. got

through tell taking you then missed start them, and I'll I if So me can one.

continued to million, my lot on a a the of and refinement. assets $XXX of portfolio first, noncore those script $XXX nature So the about in process million talked I

are those only we rationalization, benefit that perspective. to So sales. are but monetization rationalization also see do should just you footprint not portfolio a from from towards a us those a weight Those asset properties markets, expect primarily

that towards So simple weighted heavily be is expect to answer sales.

to funding intent should that $XXX year. I be, the we maturing with We on fully leftover we what this Easiest with million. way talk for the unsecured of I have would have sheet about do have disagree of guess would it. you in really math We end revolver say our the at don't I flexibility balance way be happy your off notes that May. 'XX. that our through entering with the ran paid million we're that $XXX

loans. your question, And second no penalty then we term prepayment the have to on

look revolver May the term will So then or market there, the on maturing will bonds paydown that on loans. we put that the have year with conditions. the and lot prepayment of in go combined to depend we then of And from as down we around a pay early of of flexibility that will just through

So down. a we of asset move sales news I think but into is that proceeds flexibility, the pay want noncore good have back lot do reinvest we to debt to

William John Kilichowski

Okay. helpful. this of disposition cap to moved up guess from the part Great. I X.X% I was That's think kind rate X.X% so the my really to that disposition guide, And range. second of X.X%

in necessarily 'XX sales would JV and of environment? nature contribution that's between You and dispositions portfolio say asset moving not of mix 'XX mostly the of between and this the the indicative

Austen Helfrich

right, assets. That's primarily little sales asset of some a of you're an noncore expectations correct. That's I given a these pricing see the throughout the the go nature of But nod bit to think how mix. year. that's We'll

Operator

comes from from Michael question BTIG. next Your Gorman

Michael Gorman

kind of year? portfolio Were think you how that the noncore all fourth what's of how asset allocation part And of for you starts capital active maybe of Maybe on creep then sales in that think in this the kind asset with about of I'm kind how parameters the repurchases just together. on you just also and the rate bucket changed? were cap sales through just about quarter. think equity can Austen, last here, curious still your to sticking kind as as noncore sales potentially year? you share curious up noncore pieces the Or about the cost walk that, just I'm those has of of the you

Austen Helfrich

when a at say, we mean $XXX portfolio, in did continuation markets quite more sales overall $XXX that XXXX, I of that And the talk benefit in would certain about the asset see about XXXX, over especially million and looking Yes. that we're is refinement. gloss can that question. Good what we entirely have perspective. don't on portfolio Definitely, from I position we exiting to probably a the think when million I a noncore margin and growth honestly, to I talked aggressive we

are step forward So I move aggressive think of I towards think, we that portfolio XXXX. in taking, the that more in direction is a and a refinement,

On you into the look pretty at diverse sales and if as cap in ventures. of on discussion, a We equity the some monetization cost asset obviously there that was XXXX, have was sales rate stabilized of assets. well as asset noncore X.X% did group the

So I today, core think for market assets activity still we mid-Xs. think about good we're seeing private cap the rates in

So on from MOBs XXXX. I think moved has that core pricing not

And our market matched are XXXX results really overall that dynamic.

be dynamic. I allocation think when you to going think about capital for 'XX, we're obviously,

right I balance on. 'XX. in this on we touched our mentioned, overall dilutive her in But year, is perspective, wanting a really long-term is really into to It Connie sheet a -- to are going reinvest move. the obviously growth and remarks, is earnings But for little in that. that focus We is reasons the it the will feel watching this from growth prepared moving an what

Operator

from Okusanya question Omotayo comes from Your Bank. Deutsche next

Omotayo Okusanya

probably place the or a being X also And next at we So that some you my X is platform, think look question soon delevering kind the overall how is do little in to guys growth so When is? I over of of interest for what maturities And you about a years headwind you get bit the guys maturity, term HR that bit of estimate swaps there HR and headwind. does when a the years. near the really about there? debt of a rate of around little or again, a interest as talked next took debt think earnings X a for sustainable a large headline amount

AFFO Just you basically, structure the fix that? kind kind the X%, Just through is growth And in as next capital of guys a years all this kind you this you commensurate of that of really that? growth the investors that? with dividend how get share X before X% case through do do with the the ask of company think kind per what's have for all past to of how growth? capable patient of earnings sustainable you right mean we to think But I generating

Robert Hull

now, the have I'll look think the at start our extremely an right feel that excellent in in from point an core you rates. capital we XXXX interest are earnings from headwind well. -- To obviously around growth by delevering structure, your saying made if executing I do you we like portfolio and we

when think I this I growth years you're rate of long-term look business the tell growth X%. you data the rate, where at the wrapped going of is would around XX long-term which is in space, MOB suspect that you

think in the face a we Realty has term, costs. Healthcare I headwinds of as near growth our from And the terms do to opportunity same outperform an that. excellent in refinancing peers headline many of perspective, debt

portfolio, So long think term. obviously core I leverage Tayo, the growth and your that long think total FFO can get the you if I AFFO of growth you think on the term, about to growth AFFO

talked you're are XX lot on and down for long-term and at is focused cash I a getting think a where of to history And obviously goes with executing we the and extremely story back to the is and growth that heads pieces, right for focused model, is executing we've it that durable the the flow those for the on We're And on But company. moment. flows. durable improvement of growing XXXX opportunity occupancy back near-term growth of years about. clean component that cash that are what

Constance Moore

paying proceeds debt clearly, that. rate, and sale with off the as in using the interest the difference As we headwind to that, we do have do but Austen we're the says,

have also will, a we you So reducing to debt. NOI headwind, pay if by off

two where So there's things to for in balance decision sort that us headwinds right but the get it's we the to. are want 'XX, of sheet

your to to we stabilized long-term point, get growth. a So

Operator

from John comes Green Pawlowski question next Your Street. from

John Pawlowski

conversation just XXXX in Maybe billion to topic. $X.X Austen, a that rolling XXXX. follow-on the question maturities,

XXXX of half refinance mind? tend clustered 'XX how the the appreciated. to your How would that? of the exercise More I look lot it's a Is that quickly around think address significant of second you in middle you a maturities will be to color on year.

Austen Helfrich

think primary about 'XX outlook. 'XX answered is for point debt assuming in to away the debt the those I on going I asset balance what ship unsecured pay today, we'll then maturities. our near-term b, us second sales on John. having down question I year is And then It the of outlined the really flexibility to, Obviously from be of the we're of to the well, that sheet half talked focus execute you maturities. start refinance half looking our a, second 'XX and and and the

John Pawlowski

the last that I has from around wanted back go the to there XXXX, the to changed not messaging maybe that that you dividend we're company fully know the trajectory right but relative the year, last to entering late now. FAD was really commentary the would I covered conversation close dividend. of and middle thought year, to be

to and led that's throughout in has second fundamentally changed portfolio the half So I the trajectory FAD XXXX? guess of an of underwhelming what

Constance Moore

I would obviously, saying that I in -- I of remember beginning wasn't covered point don't it be time. this that sitting in But 'XX. at seat at don't the

always out we bit 'XX, think said late depending a 'XX to potentially little I on our pushed leasing. just it and we sort of

activity communicated. as has been Our Rob extraordinary, leasing has

spent of up leasing and TI part that's I money on that lot all -- this think I a And to year of space. mean, lease we

anything visibility our I -- dividend we remember at saying that saying that on So will don't -- based don't but the 'XX, current business that our I point. wasn't covered. the we'd be because beginning, early of saying I saying into 'XX remember don't But at end plan have company but it have remember I

Austen Helfrich

want got growth that, honest here we I that to perspective John. 'XX into the the John, is to put think new question, team share of I half to our was per FAD feel a in where your up out add answer over XX%. And comfortable today. I'll back that's looking and to 'XX we've

Operator

JPMorgan. from Bely Nikita from comes question next The

Nikita Bely

providing the talk for 'XX, absorption for expect multi-tenant? over percent You 'XX? you're an to talked be specifically, do And exact you 'XX. multiturn occupancy about occupancy maybe But the can if about occupancy you comfortable guys

Austen Helfrich

well guidance the this talked total We portfolio portfolio. same-store focusing year the really No. as about on as

multi-tenant, details to year. specifically. growth on multi-tenant portfolio going growth, give the on I provide Obviously, an this intend reference, you specifically we on but we're and can growth total our not outlook single-tenant the focus don't in supplemental, you think multi-tenant given same-store that to in we do guide

I think, really streamlining the outlook simple our keeping occupancy guide versus same-store and is beneficial.

Operator

Your Markets. Sanabria line BMO Juan of Capital next question comes the from from

Juan Sanabria

letting queue me back for Thanks up.

not further little general more detail coming from we trying buybacks on to allow your this views excess just much you And to redevelopment? sure that 'XX a have dispositions sourcing uses. and think should how may the would do I'm budget just about Just hoping in on could you through towards point? you that the capital buybacks bit at go

Austen Helfrich

to going you the page our point and specifically for to 'XX. the supplemental. outlined pretty I'm We uses last of Juan, sources

of the But I to convey proactively XXXX And this what Obviously, I will we're back highlighted for leverage is million after think for focus will debt it, and into, on addressing of and focus that, reducing flexible. Obviously, you the our market real is think that, stock. $XXX the when kind be $XXX leasing on through those, somebody a watch be portfolio. call XXXX. through repayment call about will be on disposition the to focus and proceeds we're debt the come earlier million X.XXx. go the debt to on we looking you call at reducing to the asset focused maturities and Xx trying

Constance Moore

on in it our going all the operational 'XX, given And produce in activity, to -- buy debt. was is to to going pay that's us early obviously, for NAV, but saying will allow is down opportunistic of our morning, It I sales but been continuing then forward the the -- that enhancements the focus and 'XX. flow which stock really is focus 'XX, to on very between think we're leasing I additional in sort Yes. discount the back mean, just really we've cash

Juan Sanabria

may you you're some markets have a like staying. good depth enhance any dispositions sounds just as guys the Okay. you how on done of job on commentary expenses. controllable do the curious, them And have then margins further in It more may trend? You've

modeling in think the curious And about control just 'XX. so your we on as expenses margins

Robert Hull

is year, move last look in Yes, I our say would at this nice that Rob. I margins. a Juan, we if had

basis points up year-over-year. I was think it XX

the we to would in year. As improve certainly in this continue improvement we next portfolio, see occupancy expect that to

improvement projecting XX basis we're points occupancy portfolio. think to I in same-store of the XXX

would trend So upward the occupancy to that improvement. with we expect margins

Constance Moore

lot for activity of leasing that a leverage with sure. all there's margin Yes,

Juan Sanabria

wouldn't Anything you be for guidance backfilling the leases factoring terms Steward indulging those coming we in? baked in me. that's last one if And or one, online mind into of further Prospect or space should that

Austen Helfrich

No. Is good the simple answer. Juan. Really It's the answer. question,

a I early question, think touch -- on your want of bankruptcy taken Prospect, in to that is have outlined for out reasons feel simplicity just why good I 'XX fully it have on It that 'XX about do and clarity which the ahead vis-a-vis I we that. Prospect process. guidance. is few for we for But I and space. think guidance, we gone removed

And court provide expectations, the we'll updates those to you. and/or on we similar answer, As no. from process have Steward

Operator

over Q&A I the Moore session. to concludes call for closing turn now remarks. That Connie will the

Constance Moore

REIT to you joining the everyone, today. we Thank engaging next forward of at Industry look in for many Thank Thank you, Conference you. upcoming And call with month you, the Karen. Florida.

Operator

gentlemen, concludes and that may today's you disconnect. Thank call. for all joining, and you now Ladies

Healthcare Realty Trust (HR) 19 Feb 252024 Q4 Earnings call transcript