Healthcare Realty Trust Incorporated · NYSE:HR
Healthcare Realty Trust — Q4 2024 Earnings Presentation
24 slides from Healthcare Realty Trust's earnings presentation, February 2025
Slide 1: Investor Presentation
2100 Church Street NASHVILLE February 2025 Investor Presentation
Slide 2: Healthcare Realty at a Glance
Healthcare 1992 Founded $10.8B Enterprise Value 73% On/Adjacent Realty at a to Campus HR 38M 651 Glance NYSE Ticker Square Feet Owned Properties S&P 400 BBB/Baa2 $4.3B Member S&P/Moody's Cumulative Cash Dividends Paid Only Pure-Play Outpatient Medical REIT (SQUARE FEET IN MILLONS) A Differentiated,
Slide 3: Premier Outpatient Medical Platform
Premier Outpatient Medical Platform Superior scale, growth, and demographics Top 15 Markets Top Health Systems >1M SF <1M SF Scale with Top 100 Population Growth Exposure to Health Systems(1) and Density(2) Top 25 MSAs IN MILLIONS OF SQUARE FEET % OF GLA 26 831K 64% Density 19 3.0% 716K 56% Growth 2
Slide 4: 2025 Strategic Priorities
2025 Strategic Priorities Leasing Momentum and Operational Intensity • Capitalize on signed-not-occupied (SNO) pipeline to continue strong leasing momentum, generating an expected same store occupancy gain of 75-125 bps in 2025 • Tightly manage controllable operating expenses with a focus on margin
Slide 5: 4Q and 2024 Performance
4Q and 2024 Performance Finished 2024 with strong operating momentum and capital allocation execution 2.5% 4Q NFFO per Share Growth (1) 149 bps 2024 Multi-tenant Occupancy Gain 3.6% 4Q SS NOI Growth (2) $510M 2024 Share Repurchases 3.9% 4Q Multi-tenant NOI Growth (2) $350M 2024 Debt Paydown 6.4x 3.4
Slide 6: Leasing Performance Outpaces Peers | Occupancy Momentum
Leasing Performance Outpaces Peers | Occupancy Momentum New Lease Commencements Total Portfolio Occupancy / Leased Trend as % of Vacancy Against Peers TTM AVERAGE (OUTPATIENT MEDICAL ONLY) 89.8% 10.7% Total Leased 7.9% 163 bps 6.7% 7.0% 88.3% 88.2% HR DOC WELL VTR Total Occupied 86.5% Leasing Pipeli
Slide 7: 2025 Financial and Operational Expectations
2025 Financial and Operational Expectations Overlake Medical Pavilion $1.56-1.60 3.00-3.75% SEATTLE Normalized Same Store Cash FFO per Share NOI Growth(1) 75-125bps $400-500M Same Store Strategic Dispositions Absorption Same Store Tenant Retention Rate G&A 80-85% $52-56M Net Debt to Adjusted EBITDA
Slide 8: Highly Durable Growing Cash Flow
Highly Durable Growing Cash Flow HR has demonstrated consistent growth with low volatility across economic cycles Net Operating Income Retention 3.3% 3.0-3.75% 84.3% 83.9% 83.4% 2.9% 80-85% 2.7% 2.0% 2.2% 79.1% '09-'11 '12-'19 '20-'21 '22-'23 '24 '25E '12-'19 '20-'21 '22-'23 '24 '25E GFC COVID COVID
Slide 9: Portfolio Quality Allocation
Portfolio Quality Allocation Targeted dispositions monetize lower potential return assets, while JVs harvest value from stabilized assets through a fee-producing vehicle Top 50 MSA Projected Population Growth(1) Clustered Future Future Future 55-60% 2.0-2.2% 40-50% Dispos. Dispos. Dispos. Dispos. Di
Slide 10: Diversified and Necessity-Oriented Tenant Base
Diversified and Necessity-Oriented Tenant Base HR portfolio skewed to specialty care, health system-affiliated tenants Top Medical Tenant Specialties(1) 31% % HR SF AAMC PHYSICIAN MIX(2) 20% 8% 7% 6% 5% 4% 3% 3% 2% 2% 1% Obstetrics and Sports Cardiovascular Hematology Physical Primary Care / Gynecol
Slide 11: Improving Balance Sheet
Improving Balance Sheet 2025 capital allocation plan delevers the balance sheet and extends duration of debt through expected new bond issuance and repayment of bank loans BBB/Baa2 S&P/Moody's Credit Ratings Debt Maturity Schedule(1) IN MILLIONS 2,049 $2,000 38.8% 1,800 Debt to Assets 1,600 1,400 29
Slide 12: Improving Provider (Tenant) Trends
Improving Provider (Tenant) Trends Health system financials continue to improve after recent labor cost and COVID headwinds Revenue Growth Pineville Medical Plaza CHARLOTTE 3 Year 18% Total Change rating '24 vs '21 31% Outpatient +31% Outpatient 8% 1 Year Total Change '24 vs '23 9% Outpatient Pauldi
Slide 13: Secular Growth Opportunity
Secular Growth Opportunity Relative Increase in Population Annual Physician Office Visits and Healthcare Costs BY AGE, 2023 - 2O33 (Projected) BY AGE 2 Visits/year 68% of US population growth <45 <65 +6.9M $5,100/year is among the 65+ cohort 2023 2033 (+2.5%) 278M 285M 4 Visits/year 45 - 64 $11,300/
Slide 14: Strong Relative Supply - Demand Backdrop
Strong Relative Supply - Demand Backdrop Secular demand tailwinds against backdrop of rapidly declining supply, drives solid core demand for medical outpatient space Annual Average Occupancy Change Outpatient Medical Development Starts SECTOR COMPARISON TRAILING TWELVE MONTHS 4-YEAR (since pandemic)
Slide 15: Appendix
Appendix Estrella Surgery Center PHOENIX
Slide 16: Size of Outpatient Medical Market / Transaction Activity
Size of Outpatient Medical Market / Transaction Activity $491B $13.2B $9-12B Total Outpatient Medical Market Average Annual Sales New Development Each Year Investor-owned $264B (54%) TOP SELLERS (2022-2023) TOP DEVELOPERS IN 2023 Non-REITs $211B (43%) (Annual starts) SQ FT Healthcare Realty Trust $1
Slide 17: Highest Rent Coverage in Healthcare Real Estate
Highest Rent Coverage in Healthcare Real Estate Strong rent coverage leads to low default risk 2061 Peachtree ATLANTA 8 -14x Coverage Ratio(1) 5 -10x Estrella Medical Center 3.5x PHOENIX 3.2x 2.4x 1.3x 1.0x Outpatient Outpatient Inpatient Surgical Acute Skilled Assisted Medical: Medical: Rehab Hospi
Slide 18: Leveraging our Cluster Strategy
Leveraging our Cluster Strategy A cluster is at least two properties within a geographic radius of two miles. Clusters provide operational efficiencies and greater local leasing knowledge that accelerate NOI growth. Raleigh Clusters Outpatient Medical Buildings by Cluster NORTH CAROLINA Durham # of
Slide 19: WakeMed Cluster - Raleigh
WakeMed Cluster - Raleigh Tryon MOBs I & II, 1.5 mi 1000 Crescent Green 115 Crescent Commons 1400 Crescent Green 601 Keisler Drive WakeMed Cary Triangle Hospital Medical Center MPOC - 210 Ashville Avenue MPOC - 226 Ashville Avenue P MPOC - 300 Ashville Avenue MPOC - 216 Ashville Avenue Future Develo
Slide 20: Cluster Formation - Atlanta
Cluster Formation - Atlanta Investment Progression 2017 2020 2020 TODAY FUTURE Acquired three on Acquired two MOBs In coordination with Wellstar Current cluster size Embedded campus MOBs from adjacent to campus from Kennestone, acquired a 2.5 development • 491,697 SF developer two different owners a
Slide 21: Cluster Formation - Denver
Cluster Formation - Denver Investment Progression 2012 2015 2017 2018 TODAY FUTURE Developed two Acquired one Developed third Acquired three Current cluster size Embedded on campus MOBs MOB adjacent on campus MOB buildings on 15 acres development • 445,213 SF to campus of land for future potential •
Slide 22: Cluster Formation - Seattle
Cluster Formation - Seattle Investment Progression 2016 2017 2020 2020 TODAY FUTURE Acquired two on Acquired one Developed one Acquired one MOB Current cluster size Embedded campus MOBs, adjacent MOB on MOB on campus adjacent to campus development • 331,214 SF including one for 4 acres of land poten
Slide 23: Market Clustering Strategy - Seattle
Market Clustering Strategy - Seattle Investment Progression Edmonds 2008 2012 2016 2020 2024 H 4 properties $52.9M investment # of Buildings 2 6 15 27 29 171K square feet Square Feet 141K 379K 958K 1,546K 1,581K Northgate Kirkland H H Acquisition $39M $53M $327M $519M $537M 4 properties $127.1M inve
Slide 24: Additional information and forward-looking statements
Additional information regarding the Company, including this quarter's operations, can be found at www.healthcarerealty.com. In addition to the historical information contained within, this press release contains certain forward-looking statements with respect to the Company. Forward-looking stateme
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