Healthcare Realty Cuts Dividend by 23% Amid $1B Asset Sale Plan and Strategic Overhaul

Healthcare Realty Trust Incorporated has outlined plans for $1B in asset sales and a 23% reduction in its dividend amid a strategic overhaul. The company's Q2 2025 earnings saw a sequential increase in normalized FFO to $0.41 per share and FAD to $0.33 per share. President and CEO Peter A. Scott highlighted "excellent results and contributions across the organization."

Healthcare Realty Trust Incorporated (NYSE:HR) has announced significant strategic changes aimed at enhancing operational performance and maximizing shareholder value. In its second-quarter 2025 earnings report, the company highlighted a sequential increase in normalized FFO to $0.41 per share and FAD to $0.33 per share, underscoring the positive contributions across the organization.

President and CEO Peter A. Scott emphasized the "excellent results and contributions across the organization." He also announced plans to sell $1 billion worth of assets and reduce the dividend by 23%. The strategic overhaul includes a platform restructuring to drive cost savings and improved operational efficiency.

The company reported a GAAP net loss of $(0.45) per share, NAREIT FFO of $0.34 per share, and Normalized FFO of $0.41 per share. Leasing activity during the second quarter included 341 new and renewal leases totaling 1.5 million square feet, with a weighted average lease term of 5.3 years.

In terms of asset sales, Healthcare Realty Trust completed transactions totaling $182.4 million through July 2025, including the sale of properties in Yakima, WA, Houston, TX, South Bend, IN, Milwaukee, WI, New York, NY, and Naples, FL. These sales aim to optimize the portfolio and reduce debt levels.

The company also announced a series of leadership changes, including the appointment of Peter Scott as President and CEO, and the departure of Julie Wilson, EVP - Chief Administrative Officer. The restructuring aims to enhance operational performance and promote accountability.

Healthcare Realty Trust has received strong support from its lender relationships, extending its $1.5 billion revolver to 2030 and receiving additional extension options on outstanding term loans. The company's strategic plan focuses on improving operational performance, optimizing the portfolio, and re-establishing credibility.

The Board unanimously approved a common stock dividend of $0.24 per share, a 23% reduction from the prior level. The dividend reduction is intended to mitigate refinancing risk, achieve incremental retained earnings, and maximize go-forward earnings potential.

The company increased its 2025 guidance, expecting Normalized FFO per share to range between $1.57 and $1.61, and Same Store Cash NOI growth to range between 3.25% and 4.00%.

References:
[1] https://seekingalpha.com/news/4476830-healthcare-realty-outlines-1b-asset-sales-and-23-percent-dividend-reduction-amid-strategic
[2] https://investors.healthcarerealty.com/corporate-profile/press-releases/news-details/2025/Healthcare-Realty-Reports-Second-Quarter-2025-Results/default.aspx