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Healthcare Realty Trust Inc - Ordinary Shares (HR) 2 Aug 24 2024 Q2 Earnings call transcript

AInvestFriday, Aug 2, 2024 11:03 pm ET
1min read

In Healthcare Realty's second quarter earnings call, executives provided insights into the company's financial performance, operational momentum, and strategic initiatives. Here are the key takeaways from the call:

Financial Performance

- The company reported normalized FFO of $0.38 per share, which was impacted by a Steward revenue reserve. Without the reserve, the results were $0.39 per share.- Healthcare Realty increased its full-year 2024 FFO guidance midpoint by $0.05, reflecting strong execution and momentum in the first half of the year.- The company expects to generate more than $1 billion in proceeds from completed or planned JVs and asset sales.

Capital Allocation and Operational Momentum

- Healthcare Realty is making notable progress on its capital allocation objectives, including the recently announced expansion of its existing JV with Nuveen.- The company's operational momentum is strong, with more than 400,000 square feet of new leases signed in the second quarter and a first-half multi-tenant occupancy gain of 55 basis points.- The company's retention rate improved to 85%, which is expected to continue into the second half of the year.- Healthcare Realty's operations team is successfully controlling operating expenses, with expenses declining year-over-year and nearly flat for the first half of the year.

Strategic Initiatives and Outlook

- Healthcare Realty is focusing on driving occupancy gains and maintaining strong service levels across its portfolio.- The company is exploring opportunities for external growth, including acquisitions through its JV with KKR and a potential increase in asset sales.- Healthcare Realty expects to see continued demand for healthcare real estate, driven by demographic trends and the ongoing shift towards outpatient care.

Investor Questions and Answers

- Management addressed questions regarding the Steward revenue reserve, asset sales, and the company's capital allocation priorities.- There was a discussion on the impact of the Nuveen JV on the company's future growth prospects and the potential for more acquisitions through this partnership.- Analysts also inquired about the company's dividend coverage and the possibility of further debt repayments and share buybacks.

Conclusion

Overall, Healthcare Realty's second quarter earnings call highlighted the company's operational and financial progress, as well as its strategic initiatives to drive growth and capitalize on market opportunities. The company's focus on operational efficiency, capital allocation, and strategic partnerships positions it well for continued success in the healthcare real estate sector.

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