Back to top

Analyst Blog

Healthcare Realty Trust Inc. (HR - Snapshot Report), a real estate investment trust (REIT), reported first quarter 2012 funds from operations (FFO) of $27.3 million or 35 cents per share compared with $14.4 million or 21 cents per share in the year-earlier quarter. Funds from operations, a widely accepted and reported measure of REIT’s performance, is derived by adding depreciation, amortization and other non-cash expenses to net income.

Excluding the non-recurring items, FFO in the reported quarter stood at $25.9 million or 33 cents per share. The recurring FFO per share beat the Zacks Consensus Estimate by 4 cents.

For first quarter 2012, Healthcare Realty reported funds available for distribution (FAD) of $28.0 million or 36 cents per share. Funds available for distribution, a measure to ascertain a REIT’s ability to generate cash, is derived by subtracting straight-line rent and non-recurring real estate expenses from funds from operations. The recurring FAD stood at $26.6 million or 34 cents per share.

Total revenues during the reported quarter were $78.1 million compared with $72.0 million in the year-earlier quarter. Total revenues during the quarter marginally exceeded the Zacks Consensus Estimate of $77 million.

Total multi-tenant same facility net operating income (NOI) increased 6.1% year over year in the quarter. For the total portfolio, same-facility NOI growth was 2.9% in the quarter compared to the year-ago period. The same facility portfolio recorded an occupancy level of 91% at quarter-end.

NOI for company’s stabilizing properties (“SIP”) improved by approximately $500,000 compared with the previous quarter. Occupancy level increased to 28% on year-over-year basis.

Healthcare Realty's SIP portfolio’s leased properties increased to 46% sequentially. The company’s overall development portfolio is now 60% leased, including the properties that the company is funding through construction loans.

The company's multi-tenant properties exhibited an uptrend in the first quarter, backed by strong weighted average increase in lease rates. While contractual rates for in-place leases inched up 3.3%, average increase in the rate on newly executed leases hovered around 1.8%.

During the reported quarter, the company invested $37.4 million for acquiring two properties worth $21.3 million and $16.1 million for other construction activities. The company completed the construction of one on-campus building during the quarter and shifted it to the SIP portfolio.

At the end of the quarter, the company had cash and cash equivalents of $6.6 million and long-term debt of $1.4 billion. Healthcare Realty declared a dividend of 30 cents per share in the reported quarter. The dividend is equivalent to 88% of normalized FAD.

Healthcare Realty expects its SIP properties to be leased more than 50% by the second half of the year.

Healthcare Realty currently has a Zacks #2 Rank, which translates into a short-term Buy rating. We maintain our long-term Neutral recommendation on the stock. One of its competitors, HCP Inc. (HCP - Analyst Report) carries a Zacks #3 Rank, signifying short-term Hold rating.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%
STRATTEC SE… STRT 80.24 +3.00%