Download PDF

1. Company Snapshot

1.a. Company Description

Healthcare Realty Trust is a real estate investment trust that integrates owning, managing, financing and developing income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States.As of September 30, 2020, the Company owned 211 real estate properties in 24 states totaling 15.5 million square feet and was valued at approximately $5.5 billion.The Company provided leasing and property management services to 11.9 million square feet nationwide.

Show Full description

1.b. Last Insights on HR

Healthcare Realty Trust Incorporated's recent performance was positively driven by strong Q2 2025 earnings, with Normalized FFO per share at $0.41, exceeding analyst estimates. The company's strategic transformation and improved operational efficiency contributed to the beat. A reduction in the size of its Board of Directors to 7 members from 12 aimed to enhance governance and align with industry best practices. Additionally, management expressed optimism about accelerating earnings growth in 2026-2027, citing resilient cash flows and potential dividend growth.

1.c. Company Highlights

2. Healthcare Realty's Q3 2025 Earnings: A Strong Performance

Healthcare Realty delivered a robust financial performance in Q3 2025, with normalized FFO per share reaching $0.41, surpassing estimates of $0.4. The company's same-store cash NOI growth stood at 5.4% year-over-year, driven by a strong leasing activity and improved tenant retention. Revenue growth was not explicitly mentioned, but the company's focus on economic returns and cash leasing spreads is evident. Austen Helfrich, CFO, highlighted that the company's year-to-date momentum carried into Q3, with normalized FFO per share up 5% year-over-year.

Publication Date: Nov -04

📋 Highlights
  • Strong Investor Sentiment:: 100+ investor meetings held, with 2/3 of $1.1M sq ft leasing pipeline in LOI/lease documentation phase.
  • Improved Financial Metrics:: Normalized FFO of $0.41/share, net debt/EBITDA below 6x for first time since 2022.
  • Disposition Progress:: $500M sold at 6.5% cap rate; $700M remaining under contract, lowering cap rate assumption to 6.75%.
  • Operational Gains:: 89% tenant retention, 5.4% same-store cash NOI growth, $1B ATM program and $500M buyback authorized.
  • Capital Allocation Focus:: $12M restructuring costs in Q3, $22M total in last two quarters; redevelopments targeted at 9-12% IRR.

Operational Highlights

The company's operational performance was equally impressive, with a leasing pipeline of 1.1 million square feet, of which 2/3 is in the LOI or lease documentation phase. Tenant retention increased to nearly 89%, with notable deals signed with top health system partners, such as a 21,000 square foot lease with Baptist Memorial in Memphis. The company's focus on creating value through strategic relationships with health systems is yielding results, with a strong bid for outpatient medical assets in the private markets.

Disposition and Capital Allocation

Healthcare Realty is nearing completion of its disposition initiatives, with $500 million of assets sold at a blended cap rate of 6.5%. The remaining disposition pipeline totaling approximately $700 million is almost entirely under binding contract or LOI. The company has received board authorization for a $1 billion ATM equity program and up to $500 million in share buybacks, indicating a focus on strategic capital allocation.

Valuation and Outlook

With a P/E Ratio of -19.89, P/B Ratio of 1.32, and EV/EBITDA of 9.34, the market is pricing in a certain level of growth and profitability. Analysts estimate next year's revenue growth at -1.3%, indicating a potential headwind. However, the company's focus on organic growth, reinvesting capital into its real estate, and generating accretion through joint ventures is expected to drive long-term value creation.

Margin Improvement and Development

The company is working towards stabilized occupancy and margin levels, with a long-term goal of achieving 65% to 66% margins. Austen Helfrich mentioned that the company is seeing an immediate benefit from selling higher IRR value-add assets. The company is also exploring redevelopment opportunities, with yields around 9-12% and IRRs higher than that, indicating a potential avenue for growth.

3. NewsRoom

Card image cap

Creative Planning Acquires 3,911 Shares of Healthcare Realty Trust Incorporated $HR

Nov -27

Source: defenseworld.net

Card image cap

Healthcare Realty Trust Incorporated (NYSE:HR) Receives Average Rating of “Hold” from Analysts

Nov -19

Source: defenseworld.net

Card image cap

H&R Real Estate Investment Trust (HR.UN:CA) Q3 2025 Earnings Call Transcript

Nov -14

Source: seekingalpha.com

Card image cap

Teacher Retirement System of Texas Has $1.21 Million Stock Position in Healthcare Realty Trust Incorporated $HR

Nov -06

Source: defenseworld.net

Card image cap

Healthcare Realty Trust Incorporated (HR) Q3 2025 Earnings Call Transcript

Oct -31

Source: seekingalpha.com

Card image cap

Compared to Estimates, Healthcare Realty Trust (HR) Q3 Earnings: A Look at Key Metrics

Oct -31

Source: zacks.com

Card image cap

Healthcare Realty Trust (HR) Tops Q3 FFO and Revenue Estimates

Oct -30

Source: zacks.com

Card image cap

Healthcare Realty Reports Third Quarter 2025 Results

Oct -30

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.97%)

6. Segments

Rental

Expected Growth: 2.0%

Rental growth of 2.0% in Healthcare Realty Trust Incorporated is driven by increasing demand for medical office buildings and outpatient facilities, fueled by an aging population and healthcare reform. Additionally, the company's strategic acquisitions and development of high-quality properties in strong markets contribute to rental growth, while a stable tenant base and long-term leases provide a solid foundation for future growth.

Other Operating

Expected Growth: 1.5%

Healthcare Realty Trust's 1.5% Other Operating growth is driven by increasing demand for medical office buildings and outpatient facilities, fueled by an aging population and healthcare reform. Additionally, strategic acquisitions and expansions into high-growth markets, such as ambulatory surgery centers and medical office buildings, contribute to the segment's growth.

Interest Income

Expected Growth: 0.5%

Healthcare Realty Trust's 0.5% interest income growth is driven by increasing demand for healthcare services, aging population, and strategic acquisitions of medical office buildings and healthcare facilities. Additionally, the company's focus on high-quality tenants, long-term leases, and strong property management practices contribute to stable and growing interest income.

7. Detailed Products

Medical Office Buildings

Healthcare Realty Trust Incorporated owns and operates medical office buildings, providing healthcare providers with convenient and accessible facilities to deliver patient care.

Outpatient Surgery Centers

The company develops and operates outpatient surgery centers, offering a range of surgical procedures and medical treatments.

Urgent Care Centers

Healthcare Realty Trust Incorporated develops and operates urgent care centers, providing immediate, non-emergency care for patients.

Medical Retail

The company develops and operates retail spaces for healthcare-related businesses, such as pharmacies, medical supply stores, and health food stores.

Healthcare-Focused Industrial Properties

Healthcare Realty Trust Incorporated owns and operates industrial properties, such as medical device manufacturing facilities and pharmaceutical distribution centers.

8. Healthcare Realty Trust Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

Healthcare Realty Trust Incorporated operates in a niche market, providing healthcare facilities and services. While there are substitutes available, they are limited, and the company's specialized services reduce the threat of substitutes.

Bargaining Power Of Customers

Healthcare Realty Trust Incorporated's customers are primarily healthcare providers and medical professionals. They have limited bargaining power due to the specialized nature of the company's services and the lack of alternative options.

Bargaining Power Of Suppliers

Healthcare Realty Trust Incorporated relies on a network of suppliers for construction, maintenance, and other services. While suppliers have some bargaining power, the company's scale and diversified supplier base mitigate this risk.

Threat Of New Entrants

Entering the healthcare realty market requires significant capital investment and expertise. Barriers to entry, such as regulatory hurdles and high startup costs, limit the threat of new entrants.

Intensity Of Rivalry

The healthcare realty market is moderately competitive, with a few established players. While there is some rivalry, the company's diversified portfolio and strong relationships with healthcare providers mitigate the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 42.28%
Debt Cost 5.13%
Equity Weight 57.72%
Equity Cost 7.19%
WACC 6.32%
Leverage 73.24%

11. Quality Control: Healthcare Realty Trust Incorporated passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Omega Healthcare

A-Score: 6.8/10

Value: 3.5

Growth: 3.0

Quality: 8.5

Yield: 10.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
CareTrust REIT

A-Score: 6.7/10

Value: 2.2

Growth: 4.4

Quality: 7.9

Yield: 9.0

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
Sabra Health Care REIT

A-Score: 6.5/10

Value: 4.1

Growth: 3.4

Quality: 6.8

Yield: 10.0

Momentum: 5.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
Healthcare Realty Trust

A-Score: 5.9/10

Value: 4.4

Growth: 2.9

Quality: 3.3

Yield: 10.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

View Full Report
Stock-Card
Ventas

A-Score: 5.4/10

Value: 1.3

Growth: 3.6

Quality: 4.2

Yield: 7.0

Momentum: 7.0

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
Medical Properties Trust

A-Score: 5.3/10

Value: 6.7

Growth: 0.9

Quality: 3.2

Yield: 10.0

Momentum: 7.0

Volatility: 4.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

17.4$

Current Price

17.4$

Potential

-0.00%

Expected Cash-Flows