Healthcare Realty Trust Incorporated Q1 FY2026 earnings call

Pete Scott noted significant progress in past year, including enhanced operating platform, refined portfolio, and right-sized balance sheet. First quarter saw strong leasing, same-store NOI growth, stock buybacks, joint venture acquisition, and stabilized redevelopment portfolio. Organic growth pillars: industry-wide occupancy near 93%, same-store occupancy improvement, annual escalators >3%, retention rate 93.5%, improved cash leasing spreads. External growth and capital allocation: disciplined approach to stock buybacks, joint venture acquisitions, and redevelopment. Rob Hull highlighted strong leasing execution, improved lease economics, and key health system relationships. Dan Gabay discussed strong financial results, active capital allocation, and new credit facilities.

First quarter saw over 2 million square feet of leases signed, same-store NOI growth of nearly 7% (an all-time high). Same-store occupancy improved to 92.3% (+110bps y-o-y), total occupancy to 90.5%. Average annual escalator on signed leases over 3%, cash leasing spread 4.2% (1 out of 4 leases >5%). Normalized FFO per share $0.41, same-store cash NOI growth 6.9%.

Increased full-year normalized FFO per share guidance to $1.59-$1.65 (midpoint $1.62) and same-store cash NOI growth guidance to 3.75%-4.75% (25bps increase). Guidance does not include additional acquisitions, redevelopment, or incremental share repurchases for remainder of year.

Potential risks include market interest rate fluctuations, lease expiration risks, and asset disposal risks.

Q: John Kieliszewski asked about same-store guidance conservatism and capital allocation push-pull.

A: Pete Scott responded on strong first quarter, growth expectations, and disciplined capital allocation.

Q: Nick Ulico inquired about total occupancy timeline and development pipeline.

A: Pete and Rob Hull discussed redevelopment pre-leasing and pipeline strength.

Q: Michael Carroll asked about early renewal drivers and disposal plans.

A: Pete mentioned extending lease terms and potential asset dispositions.

Q: Michael Goldsmith questioned same-store occupancy ceiling and acquisition yield.

A: Pete and Dan Gabay talked about occupancy targets and acquisition yield details.

Q: Austin Worshmuth asked about achievable growth level and cap rates on dispositions.

A: Pete anchored around organic growth above 5% and cap rate examples.

Q: Rich Anderson asked about growth redefinition and core asset sale governors.

A: Pete discussed value creation and disciplined core asset sales.

Q: Daniela de Armas Rosales asked about negative rent spreads.

A: Response on selectively allowing modest roll downs for tenant retention.

Q: Michael Storiak asked about NOI growth moving pieces.

A: Answer on low lease expirations and strong growth expectations.

Q: Robin Haneland asked about three-year plan updates.

A: Pete mentioned tracking ahead of schedule and execution intensity.