Healthcare Realty Trust Inc.
(
HR
), a real estate investment trust (REIT), reported second quarter
2012 funds from operations (FFO) of $26.5 million or 34 cents per
share compared with $22.4 million or 31 cents per share in the
year-earlier quarter. The reported FFO per share marginally beat
the Zacks Consensus Estimate by a penny.
For second quarter 2012, Healthcare Realty reported funds available
for distribution (FAD) of $27.8 million or 36 cents per share.
Total revenues during the reported quarter were $78.7 million,
compared with $71.7 million in the year-ago quarter. Total revenues
during the quarter marginally exceeded the Zacks Consensus Estimate
of $78 million.
Total multi-tenant same facility net operating income (NOI)
increased 3.5% year over year in the quarter. For the total
portfolio, same-facility NOI growth was 2.1% in the quarter
compared to the year-ago period. The same facility portfolio
recorded an occupancy level of 90% at quarter-end.
Adjusted NOI for company's stabilizing properties (SIP) improved by
approximately $300,000 compared with the previous quarter.
Occupancy level increased to 33% on year-over-year basis.
Healthcare Realty's SIP portfolio was 51% leased, up from 46%
sequentially. The company's overall development portfolio is now
62% leased, including the properties that the company is funding
through construction loans. At quarter-end, the company had only
one property under construction (40% leased), which it expects to
complete in the third quarter of 2012.
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 3.1%,
average increase in the rate on newly executed leases hovered
around 1.8%.
During the reported quarter, the company invested $28.5 million for
acquiring a property worth $10.7 million, $15.6 million in two
existing construction mortgages, and $2.2 million in one property
under construction.
Healthcare Realty continued its strategic shift towards lower-risk,
on-campus medical office buildings. About 77% of the total medical
office properties were located on or adjacent to hospital campuses
in the second quarter of 2012, compared to 66% eight quarters ago.
Cash flow from operations during the quarter was $41.9 million
compared to $36.8 million in the prior year. At the end of the
quarter, the company had cash and cash equivalents of $3.1 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 83% of FAD.
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. We also have a Neutral recommendation
and a Zacks #2 Rank for
HCP Inc.
(
HCP
), one of the competitors of Healthcare Realty.
Note: 1. FFO, a widely accepted and reported measure of REIT's
performance, is derived by adding depreciation, amortization and
other non-cash expenses to net income.
2. FAD, 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.
HCP INC (HCP): Free Stock Analysis Report
HEALTHCARE RLTY (HR): Free Stock Analysis
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