Healthcare Realty Trust Incorporated · NYSE:HR
Healthcare Realty Trust — Healthcare Trust of America — Investor Presentation (September 2021)
32 slides from Healthcare Realty Trust's investor presentation, Sep 13, 2021
Slide 1: The Largest Dedicated Owner & Operator of Medical Office Buildings in the U.S.
HEALTHCARE TRUST OF AMERICA, INC. The Largest Dedicated Owner & Operator of Medical Office Buildings in the U.S. September 2021 Memorial Hospital MOB Bakersfield, CA
Slide 2: Forward Looking Statements
F O R WA R D L O O K I N G S TAT E M E N T S This document contains both historical and forward‐looking statements. Forward‐looking statements are based on current expectations, plans, estimates, assumptions and beliefs, including expectations, plans, estimates, assumptions and beliefs about our com
Slide 3: HTA: The Largest Dedicated Owner & Operator of Medical Office Buildings
3 All values as of June 30, 2021, unless otherwise noted. (1) Includes 100% of consolidated and unconsolidated properties as of June 30, 2021 (2) Top 20 markets based on % of annualized base rent contribution as of June 30, 2021 (3) Based on GLA (4) Listing was on June 6th, 2012; Market data as of 9
Slide 4: Investment highlights: high-demand sector leader
67% • High-Demand Sector Leader: Medical office is in demand from tenants and investors. Private capital interest remains high given return profile. • Industry Leading Portfolio: Core, critical MOBs where healthcare demand is growing: on‐campus, core community outpatient, and academic locations. Wit
Slide 5: Performance Highlights
PERFORMANCE HIGHLIGHTS Lincoln Medical Center Parker, CO
Slide 6: Highlights: portfolio performance, investment activity, balance sheet & liquidity
HIGHLIGHTS PORTFOLIO PERFORMANCE INVESTMENT ACTIVITY BALANCE SHEET & LIQUIDITY • Normalized FFO of $0.44 per diluted share, an increase of 4.8% compared to Q2 2020. • Normalized FAD of $81MM, an increase of 4.5% compared to Q2 2020. • Same Store Cash NOI growth of 2.1%. • Leased rate of 89.3% by GLA
Slide 7: Leadership Update and Investment Activity
LEADERSHIP UPDATE INVESTMENT ACTIVITY • HTA’s Board has initiated its search for a permanent CEO. As part of this, it has formed an independent Search Committee and has retained Spencer Stuart, a leading global executive search firm, to assist with these efforts. • In Q3 2021, closed on four MOB acq
Slide 8: Critical Mass in Established Gateway Markets
Critical Mass in Established Gateway Markets PORTFOLIO SNAPSHOT 8 Key Markets Total GLA (1) % of Portfolio Dallas, TX 2,101 8.3% Houston, TX 1,665 6.6% Indianapolis, IN 1,396 5.5% Phoenix, AZ 1,316 5.2% Miami, FL 1,227 4.8% Hartford/New Haven, CT 1,165 4.6% Atlanta, GA 1,121 4.4% Pittsburgh, PA 1,09
Slide 9: Key Market Strategy Drives Investment Decisions
‐ 500 1,000 1,500 2,000 2,500 Dallas Houston Indianapolis Phoenix Miami Hartford/New Haven Atlanta Pittsburgh Boston Tampa Charlotte Albany Raleigh Orange County/Los Angeles New York Denver Orlando GLA 2016 2021 HTA MARKET STRATEGY 9 Key Market Strategy Drives Investment Decisions 2021 Dispositions
Slide 10: Development Platform Drives Accretive Growth
DEVELOPMENT PLATFORM DRIVES ACCRETIVE GROWTH WakeMed Cary MOB – Raleigh, NC Project Highlights: GLA: 127,000 SF Project Cost: $46MM Currently Leased: 90%+ Completed Fall 2020 Adjacent to WakeMed Cary Hospital HTA’s Development Platform utilizes our MOB expertise, market intelligence, and relationshi
Slide 11: Development Pipeline
DEVELOPMENT PIPELINE 2021 Investment Activity Development Update HTA is actively pursuing multiple development opportunities in our key markets. These projects include hospital direct deals, local developer JV’s, and developments on land HTA owns or has purchased. It total, our pipeline consists of
Slide 12: HTA's Investment in the Texas Medical Center
HTA’S INVESTMENT IN THE TEXAS MEDICAL CENTER 12 Texas A&M Horizon Tower 6655 Travis MOB HTA 7900 Fannin HTA 1200 Binz 1 4 3 2 1 4 3 2 127k square feet Leased to: UT Health (majority) Acquired in 2021 for $43MM Fee‐Simple ownership 178k square feet Leased to: HCA Acquired in 2010 for $3
Slide 13: Texas A&M Innovation Plaza
TEXAS A&M INNOVATION PLAZA HTA has formed a strategic partnership with Medistar Corporation to finance and co‐develop the Texas A&M Innovation Plaza, a five‐acre mixed‐use project located at the Texas Medical Center, the largest medical center in the world Innovation Plaza Highlights The Texas A&M I
Slide 14: Continued Focus and Dedication to ESG Initiatives
CONTINUED FOCUS AND DEDICATION TO ESG INITIATIVES 14 SocialEnvironment Governance Corporate responsibility partnerships Participant member Member Partner 73% HTA‐managed properties benchmarked on Energy Star Monitor utility usage reduction in water usage (2019 to 2020) (4%) Established ESG subcommit
Slide 15: ESG Goal Alignment with UN Sustainable Development Goals
CONTINUED FOCUS AND DEDICATION TO ESG INITIATIVES Goal Alignment with United Nations Sustainable Development Goals (SDGs) SDG Number (1) Objective Maintain comprehensive employee benefits package Maintain inclusive and diverse workforce Provide training opportunities to develop employee talent Provi
Slide 16: The HTA Difference
THE HTA DIFFERENCE WakeMed Medical Park of Cary Raleigh, NC
Slide 17: Since 2014, We Have Grown Our Portfolio & Earnings
SINCE 2014, WE HAVE GROWN OUR PORTFOLIO & EARNINGS WHILE INCREASING OUR CAPABILITIES AND ESTABLISHING SCALE IN KEY MARKETS WHICH WE BELIEVE FACILITATES COMPANY OPERATIONS & LONG‐TERM GROWTH OPPORTUNITIES Portfolio Size ($B) $3.0B $7.5B Portfolio Size (GLA in millions) 14.1MM SF 25.3MM SF Top Five MS
Slide 18: Proven Track Record of Performance to Bottom Line
INCREASING NORMALIZED FFO/ SHARE SAME STORE CASH NOI GROWTH DIVIDENDS PER SHARE PROVEN TRACK RECORD OF PERFORMANCE TO BOTTOM LINE 18 Continued earnings growth through COVID‐19 2.6% Average Same Store NOI Growth Since 2014 13% Dividend Growth Since 2014 203% Shareholder Return since Inception
Slide 19: The Only MOB REIT with Proven, Consistent Dividend Growth
THE ONLY MOB REIT WITH PROVEN, CONSISTENT DIVIDEND GROWTH 19 DIVIDEND/SH GROWTH (2Q’14 – CURRENT) Source: FactSet (1) Information for PEAK is reflective of dividend growth post spinoff of Quality Care Properties, Inc. in Q4 2016 13.0% 2.2% 0.8% (18.9%) HTA DOC HR PEAK
Slide 20: Continued Leasing Strength
CONTINUED LEASING STRENGTH 20 OCCUPANCY LEASINGRE-LEASING SPREADS RETENTION (In thousands) 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 2
Slide 21: Embedded Upside from Future Leasing Activity
EMBEDDED UPSIDE FROM FUTURE LEASING ACTIVITY 21 PORTFOLIO OCCUPANCY (%) 87.9% 89.9% 90.8% 91.6% Current (as of 6/30/21) Pre‐COVID (as of 12/31/19) Long‐term average Historical high Incremental NOI per share opportunity (3) (1) Based on average of 2016 – 2019 (2) Portfolio occupancy % as of 2Q 2016 (
Slide 22: On-Campus and Off-Campus Facilities Essential to Healthcare Delivery
Key Considerations: Strategically located, multi‐tenanted MOBs within high‐income, faster growth submarkets that are increasingly targeted by healthcare providers Advances in technology have allowed an increasing number of procedures to be performed off‐campus; including knee and hip replacement
Slide 23: Tenant Diversification and Viability Position Portfolio for Long-Term Performance
Tenant Diversification and Viability Position our Portfolio for Long-Term Performance Credit Rated Tenancy (% of Annualized Base Rent) Tenant Classification (% of Annualized Base Rent) Our Partners are the Top Health Systems in our Key Markets in both On‐Campus and Off‐Campus Facilities STRONG STABL
Slide 24: Strong Balance Sheet and Significant Liquidity Positioned for Growth
STRONG BALANCE SHEET AND SIGNIFICANT LIQUIDITY POSITIONED FOR GROWTH 24 Capital structure Well-Staggered Debt Maturities ($mm) Multiple Capital Sources ($mm) Highlights (1) Includes undrawn capacity on unsecured revolving credit facility, cash and cash equivalents, restricted cash and net cash from
Slide 25: MOB Sector Update
MOB SECTOR UPDATE The Pavilion MOB Dallas, TX
Slide 26: The Medical Office Building Thesis
13% 52% 10% 24% REITs Hospitals / Health Systems Provider Owner Investor / Private THE MEDICAL OFFICE BUILDING THESIS Why Healthcare? • Healthcare is the fastest growing sector in dollars and in employment within the US. • Healthcare is shifting to outpatient locations to focus on cost‐effective car
Slide 27: Trends in Healthcare Delivery
TRENDS IN HEALTHCARE DELIVERY 27 Shift to Outpatient Care • ASCs drive efficiency and accessibility through streamlined care, resulting in more affordable healthcare delivery and increased demand. As a result, ASC market is projected to grow at a compound annual growth rate of 6% between 2018 and 20
Slide 28: Private Market Demand for MOB Remains High
PRIVATE MARKET DEMAND FOR MOB REMAINS HIGH 28 (1) Source: Revista Q2’21 Medical Real Estate Transactions Report published 8/10/21; Cap rate represents the average between the 75th percentile and the lowest cap rate in the Revista report 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q
Slide 29: On-Campus & Community Core Outpatient
Community-Core Trends: • Over the past decade, care options, including those provided by ambulatory surgery centers have expanded in community‐core settings • Convenience plays an increasing role as patients have an alternative to traditional on‐campus visits – allowing for care delivery typically c
Slide 30: Medical Office Resiliency During COVID-19
MOBs demonstrated their stability during the COVID pandemic, with patient visits rebounding quickly after the initial shut‐downs. Note: Data are presented as a percentage change in the number of visits in a given week from the baseline week (Week 10, or March 1–7, 2020). “Typical year” data from 201
Slide 31: Telemedicine: Impact on Medical Office
There is a distinct variation in telemedicine use across specialties. Specialty practices are continuing to see the majority of patients in a clinical setting, which we expect to continue post‐COVID TELEMEDICINE: IMPACT ON MEDICAL OFFICE 56% 25% 17% 17% 14% 14% 13% 12% 8% 7% 6% 6% 5% 4% 3% 3% 3% 3%
Slide 32: Thank You
THANK YOU Coral Reef MOB Miami, FL
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