Healthcare Realty Reports First Quarter 2025 Financial Results and Declares Quarterly Dividend of $0.31 Per Share
Healthcare Realty Trust Incorporated (NYSE: HR), a leading real estate investment trust (REIT) focused on owning, operating, and developing high-quality outpatient medical facilities across the United States, today announced its financial and operational results for the first quarter ended March 31, 2025. In conjunction with its earnings announcement, the Company also declared a quarterly dividend of $0.31 per share of common stock and per operating partnership unit.
Financial Results Overview
For the three-month period ending March 31, 2025, Healthcare Realty reported a net loss attributable to common stockholders of $44.9 million, or $(0.13) per diluted share. While the net result reflects ongoing industry-wide pressures and asset repositioning efforts, the Company continues to emphasize its underlying operational strength and portfolio stability.
In terms of core operating performance, Normalized Funds from Operations (FFO) per share—a key metric for REITs and widely used by investors to assess cash-generating performance—totaled $0.39 for the quarter. This figure was in line with internal expectations and indicative of continued stability in the Company’s same-store operations, leasing activity, and asset management initiatives.
Operational Performance and Portfolio Metrics
As of March 31, 2025, Healthcare Realty’s same-store occupancy across its portfolio reached 89.3%, showing a slight but meaningful improvement from 89.2% at the end of the fourth quarter in 2024. This incremental gain reflects effective leasing efforts and tenant retention strategies, especially in a competitive environment marked by evolving healthcare delivery trends and economic uncertainty.
The Company completed leasing transactions totaling 1.45 million square feet during the quarter, across 377 lease agreements. This activity was composed of:
- 1,002,000 square feet of lease renewals, representing strong retention across its tenant base;
- 448,000 square feet of new lease commencements and expansions, signaling continued tenant demand for well-located, high-quality medical office space.
In addition, during the quarter Healthcare Realty executed new lease signings totaling 370,000 square feet, positioning the portfolio for future revenue growth.
Same Store Performance and Tenant Retention
From a same-store perspective, cash Net Operating Income (NOI) increased 2.3% year-over-year in the first quarter, underscoring the durability of the Company’s core outpatient medical office portfolio. The growth in cash NOI was driven by consistent rent collections, stable occupancy, and improved leasing spreads.
Tenant retention improved meaningfully during the quarter, rising to 84.8%, up from 81.6% in the fourth quarter of 2024. This demonstrates the Company’s success in maintaining strong relationships with its healthcare provider tenants and minimizing turnover-related downtime.
Additionally, Medical Office Building (MOB) cash leasing spreads—the difference between new and expiring lease rates—came in at 2.3%, indicating modest rental rate growth and sustained market demand in the sector.
Capital Recycling and Balance Sheet Initiatives
Healthcare Realty continued to execute on its capital recycling strategy aimed at improving asset quality and liquidity. The Company generated approximately $66 million in gross proceeds from disposition and loan activities, which included:
- $28 million from asset sales completed during the first quarter; and
- $38 million from a loan repayment received in April 2025, providing additional capital flexibility.
On the balance sheet front, the Company proactively repaid $35 million of its term loans due in 2026 during January, further strengthening its financial position. As of the end of the quarter, Healthcare Realty’s run-rate net debt to adjusted EBITDA stood at 6.4x, a leverage level that remains within the Company’s targeted range.
Management emphasized its commitment to maintaining a strong and flexible balance sheet, with ample liquidity and prudent capital management to support future investments, debt obligations, and shareholder returns.
Leadership Transition
During the quarter, Healthcare Realty announced a significant leadership transition. Effective April 15, 2025, Peter A. Scott was appointed as the Company’s President and Chief Executive Officer. Mr. Scott brings extensive experience in healthcare real estate, finance, and operations, and is expected to join the Company’s Board of Directors following the 2025 Annual Meeting of Stockholders.
Connie Moore, who had served as Interim President and CEO from November 2024 through April 14, 2025, will continue to serve as a member of the Board of Directors. The Company expressed its appreciation for Ms. Moore’s leadership during the transition and credited her with maintaining continuity and focus during a pivotal period.
Mr. Scott’s appointment is viewed as a strategic move to reinforce the Company’s leadership team and position Healthcare Realty for its next phase of growth and operational excellence.
Dividend Declaration
Healthcare Realty’s Board of Directors declared a cash dividend of $0.31 per share for the first quarter of 2025. The dividend is payable on May 23, 2025, to Class A common stockholders of record as of May 12, 2025.
In addition, holders of the Company’s operating partnership units will receive a distribution of $0.31 per unit, consistent with the dividend paid to common stockholders. The dividend reflects the Company’s ongoing commitment to delivering reliable shareholder returns, underpinned by stable cash flows from a high-quality, healthcare-focused portfolio.
Commentary
Despite reporting a net loss for the quarter, management remains confident in the Company’s overall trajectory. The combination of stable same-store growth, strong leasing momentum, and disciplined capital allocation supports the Company’s long-term objectives.
Healthcare Realty continues to benefit from structural tailwinds in the healthcare real estate sector, including the growing demand for outpatient care, aging demographics, and increased focus on cost-effective healthcare delivery settings. These trends support long-term tenant demand for the Company’s medical office facilities, many of which are located on or near hospital campuses in high-growth markets.
The leadership team also reiterated its commitment to:
- Driving long-term shareholder value through operational excellence and active asset management;
- Prudent capital allocation, including disciplined recycling of capital from non-core assets into higher-quality opportunities;
- Maintaining a strong balance sheet to navigate macroeconomic headwinds and capitalize on strategic opportunities.
Healthcare Realty’s first-quarter results reflect both the near-term challenges and enduring strengths of its portfolio and business model. The Company’s strong same-store NOI growth, resilient leasing activity, improved tenant retention, and proactive financial management form a solid foundation for long-term performance.
With a new CEO at the helm and a sharpened strategic focus, Healthcare Realty appears well-positioned to navigate the evolving healthcare real estate landscape while delivering value to shareholders through consistent dividends and disciplined growth.
For more information, including a detailed breakdown of first-quarter 2025 financial and operating results, please visit the Company’s investor relations website or access the full earnings release and supplemental materials.
