Healthcare Realty Reports Third Quarter 2025 Results

Rhea-AI Summary

Healthcare Realty (NYSE:HR) reported results for the quarter ended September 30, 2025 with GAAP net loss $(0.17) per share, NAREIT FFO $0.34 per share, Normalized FFO $0.41 per share, and FAD $116.9 million (payout ratio 73%).

Same-store cash NOI rose +5.4% driven by a 90 bp occupancy gain, 88.6% tenant retention and +3.9% cash leasing spreads. Q3 lease activity totaled 1.6 million sq ft. The company completed $404 million of asset sales in Q3 through October and has YTD sales of $486 million at a blended 6.5% cap rate, with ~$700 million additional under contract or LOI.

Balance sheet: run-rate Net Debt/Adjusted EBITDA 5.8x (expected 5.4x–5.7x year-end), ~$1.3 billion liquidity, and repayment of a $151 million term loan in October. Board approved a $0.24 common dividend payable Nov 21, 2025. Normalized FFO guidance raised to $1.59–$1.61 and same-store NOI guidance to 4.00%–4.75% for 2025.

Positive

• Same-store cash NOI growth of 5.4%
• Normalized FFO raised to $1.59–$1.61 per share for 2025
• $404 million of asset sales completed in Q3 through October (YTD $486M)

Negative

• Run-rate Net Debt to Adjusted EBITDA at 5.8x
• Blended cap rate 6.5% on YTD sales could imply limited yield compression

Insights

Real Estate Finance Analyst

Solid operational cash flow and asset monetization tightened leverage while guidance lifted; GAAP loss masks strong core REIT metrics.

In the quarter Healthcare Realty reported a GAAP net loss but posted positive operating measures: NAREIT FFO of $0.34 per share, Normalized FFO of $0.41 per share, and FAD of $116.9 million with a payout ratio of 73%. Same store cash NOI grew 5.4, driven by a 90 basis‑point occupancy increase and 3.9 cash leasing spreads; leasing volume totaled 1.6 million square feet with a long average lease term of 5.8 years, which supports recurring cash flow and rent escalation capture.

The balance sheet and capital allocation actions materially shape near‑term risk. The company completed $404 million of sales in the quarter and YTD sales of $486 million, has ~$700 million under contract/LOI, and reports ~$1.3 billion of liquidity through October while reducing run‑rate Net Debt/Adjusted EBITDA to 5.8 and expecting 5.4–5.7 by year end; these moves support the dividend and the decision to raise Normalized FFO guidance to $1.59–$1.61 per share and same store cash NOI guidance to 4.00–4.75.

Key dependencies and watchpoints include the closing of the Richmond sale expected in the fourth quarter and the ~$700 million of additional dispositions under contract/LOI, which materially affect leverage and liquidity if completed. Monitor the announced dividend payment on November 21, 2025 (record date November 11, 2025) and the company’s year‑end Net Debt/Adjusted EBITDA target as near‑term indicators. Expect meaningful updates by Q4 2025 close when disposition closings and year‑end leverage metrics become visible.

NASHVILLE, Tenn., Oct. 30, 2025 (GLOBE NEWSWIRE) -- Healthcare Realty Trust Incorporated (NYSE:HR) today announced results for the third quarter ended September 30, 2025.

THIRD QUARTER 2025 HIGHLIGHTS

• GAAP Net Loss of $(0.17) per share, NAREIT FFO of $0.34 per share, Normalized FFO of $0.41 per share, and FAD of $116.9 million (payout ratio of 73%)
• Same store cash NOI growth of +5.4% was driven by 90 basis points of occupancy increase and tenant retention of 88.6% with +3.9% cash leasing spreads
• Increased 2025 guidance for Normalized FFO per share to $1.59 - $1.61 and same store cash NOI growth to 4.00% - 4.75%
• Third quarter lease executions totaled 1.6 million square feet including 441,000 square feet of new lease executions
• During the third quarter and through October, completed asset sales of $404 million through 15 separate transactions
  • YTD sales total $486 million at a blended 6.5% cap rate
  • Approximately $700 million of additional sales are under contract or LOI
• Run-rate Net Debt to Adjusted EBITDA of 5.8x; anticipated to be between 5.4x and 5.7x by year end

THIRD QUARTER 2025 RESULTS

	THREE MONTHS ENDED
	SEPTEMBER 30, 2025						SEPTEMBER 30, 2024
(in thousands, except per share amounts)	AMOUNT			PER SHARE			AMOUNT			PER SHARE
GAAP Net loss	$	(57,738	)	$	(0.17	)	$	(93,023	)	$	(0.26	)
NAREIT FFO, diluted	$	118,922		$	0.34		$	77,288		$	0.21
Normalized FFO, diluted	$	145,340		$	0.41		$	142,049		$	0.39

LEASING ACTIVITY

During the third quarter, the Company executed 333 new and renewal leases for 1.6 million square feet.

• Weighted average lease term was 5.8 years with an average annual escalator of 3.1%.
• Health system leasing comprised approximately 48% of our signed lease volume in the quarter.

Key leasing highlights:

• Memphis, TN. 21,000 square foot new lease with our health system partner, Baptist Memorial Health, taking our on-campus building to 100% leased
• Dallas, TX. 19,000 square foot new lease with a premier national healthcare service provider on a Baylor Scott & White Health campus, increasing the building to approximately 100% leased
• Fort Worth, TX. 18,000 square foot new lease with Baylor Scott & White Health in our recently delivered development on their growing downtown campus bringing total building leased percentage to 72%
• Seattle, WA. 25,000 square foot renewal in our fully occupied on-campus building on Multicare's Overlake Medical Center in the Bellevue submarket representing a 22% cash leasing spread

CAPITAL ALLOCATION

Dispositions

During the third quarter and through October, the Company made further progress on its previously identified disposition portfolio through 15 different transactions for a total of $404 million. A summary of the significant sale transactions is as follows:

• Columbus, OH. Monetization of three off-campus MOBs sold to the affiliated health system for $34 million
• Milwaukee, WI. Strategic market exit of Milwaukee MSA with the $60 million sale of two MOBs to the affiliated health system
• Chicago, IL. Reduced exposure to this non-core market through the sale of an off campus property to a health system for $19 million
• Tampa, FL. Opportunistic sale of a fully stabilized asset to the affiliated health system at premium valuation of $22 million   
• Dallas, TX. Sale of four on-campus properties to the affiliated health system for $59 million in conjunction with securing material new and renewal lease executions
• Richmond, VA. The Company is under contract to sell its six, fully-leased MOBs in the Richmond, VA MSA for $171 million, harvesting full value at attractive market pricing. The sale would represent a full exit from Richmond, where we have observed few future growth opportunities. Due diligence has expired, and the transaction is expected to close in the fourth quarter, subject to customary closing conditions

Development and Redevelopment

During the third quarter, the Company made significant progress on its development and redevelopment pipeline, advancing several key projects across major markets. Highlights include:

• Fort Worth, TX. Recently delivered our 101,000 square foot, $48 million development that is currently 72% leased. This building represents our third on Baylor Scott & White’s All Saints campus
• Seattle, WA. Located in the dense Northgate submarket where the Company owns three fully-leased properties on and adjacent to the UW Medical Center - Northwest campus. The $13.6 million redevelopment will transform this building into a modern outpatient facility to drive occupancy and rent growth
• Denver, CO. Part of a three-MOB portfolio located adjacent to the growing UCHealth Highlands Ranch Hospital campus in the Highlands Ranch submarket. The $7.3 million redevelopment of this mixed-use outpatient campus will allow the Company to upgrade to modern clinical suites at superior rental rates
• Charlotte, NC. The Company's third medical conversion project in the growing Huntersville submarket. The $19.2 million redevelopment will capture growth from the adjacent Novant Huntersville hospital

Balance Sheet

Debt paydown from asset sales has decreased run-rate Net Debt to Adjusted EBITDA to 5.8x. By year-end, Net Debt to Adjusted EBITDA is anticipated to be between 5.4x - 5.7x. Through October and inclusive of asset sales, the Company has approximately $1.3 billion of liquidity.

In October, the Company fully repaid the $151 million term loan due May 2027.

DIVIDEND

The Board unanimously approved a common stock dividend in the amount of $0.24 per share to be paid on November 21, 2025, to Class A common stockholders of record on November 11, 2025. Additionally, the eligible holders of operating partnership units will receive a distribution of $0.24 per unit, equivalent to the Company's Class A common stock dividend.

GUIDANCE

The Company increased its Normalized FFO per share and Same Store Cash NOI growth guidance, as outlined below, as well as updated the guidance provided on page 29 of the Supplemental Information:

	EXPECTED 2025
	PRIOR						CURRENT						ACTUAL
	LOW			HIGH			LOW			HIGH			3Q 2025			YTD
Earnings per share	$	(0.78	)	$	(0.73	)	$	(0.86	)	$	(0.81	)	$	(0.17	)	$	(0.75	)
NAREIT FFO per share	$	1.42		$	1.46		$	1.39		$	1.41		$	0.34		$	1.02
Normalized FFO per share	$	1.57		$	1.61		$	1.59		$	1.61		$	0.41		$	1.20
Same Store Cash NOI growth		3.25	%		4.00	%		4.00	%		4.75	%		5.4	%		4.6	%

The 2025 annual guidance range reflects the Company's view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels, interest rates, and operating and general and administrative expenses. The Company's guidance does not contemplate impacts from gains or losses from dispositions, potential impairments, or debt extinguishment costs, if any. There can be no assurance that the Company's actual results will not be materially higher or lower than these expectations. If actual results vary from these assumptions, the Company's expectations may change.

EARNINGS CALL

On Friday, October 31, 2025, at 9:00 a.m. Eastern Time, Healthcare Realty Trust has scheduled a conference call to discuss earnings results, quarterly activities, general operations of the Company and industry trends.

Simultaneously, a webcast of the conference call will be available to interested parties at https://investors.healthcarerealty.com/corporate-profile/webcasts under the Investor Relations section. A webcast replay will be available following the call at the same address.

Live Conference Call Access Details:

• Domestic Dial-In Number: +1 800-715-9871 access code 4950066;
• All Other Locations: +1 646-307-1963 access code 4950066.

Replay Information:

• Domestic Dial-In Number: +1 800-770-2030 access code 4950066;
• All Other Locations: +1 609-800-9909 access code 4950066.

ABOUT HEALTHCARE REALTY

Healthcare Realty Trust Incorporated (NYSE: HR) is the largest, pure-play owner, operator and developer of medical outpatient buildings in the United States.

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 statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “target,” “intend,” “plan,” “estimate,” “project,” “continue,” “should,” “could," "budget" and other comparable terms. These forward-looking statements are based on the Company's current plans, objectives, estimates, expectations and intentions and inherently involve significant risks and uncertainties. Such risks and uncertainties include, among other things, the following: the Company’s expected results may not be achieved; risks related to future opportunities and plans for the Company, including the uncertainty of expected future financial performance and results of the Company; pandemics or other health crises; increases in interest rates; the availability and cost of capital at expected rates; competition for quality assets; negative developments in the operating results or financial condition of the Company's tenants, including, but not limited to, their ability to pay rent; the Company's ability to reposition or sell facilities with profitable results; the Company's ability to release space at similar rates as vacancies occur; the Company's ability to renew expiring leases; government regulations affecting tenants' Medicare and Medicaid reimbursement rates and operational requirements; unanticipated difficulties and/or expenditures relating to future acquisitions and developments; changes in rules or practices governing the Company's financial reporting; the Company may be required under purchase options to sell properties and may not be able to reinvest the proceeds from such sales at rates of return equal to the return received on the properties sold; uninsured or underinsured losses related to casualty or liability; the incurrence of impairment charges on its real estate properties or other assets; other legal and operational matters; and other risks and uncertainties affecting the Company, including those described from time to time under the caption “Risk Factors” and elsewhere in the Company’s filings and reports with the SEC, including the Company's Annual Report on Form 10-K for the year ended December 31, 2024. Moreover, other risks and uncertainties of which the Company is not currently aware may also affect the Company's forward-looking statements and may cause actual results and the timing of events to differ materially from those anticipated. The forward-looking statements made in this communication are made only as of the date hereof or as of the dates indicated in the forward-looking statements, even if they are subsequently made available by the Company on its website or otherwise. The Company undertakes no obligation to update or supplement any forward-looking statements to reflect actual results, new information, future events, changes in its expectations or other circumstances that exist after the date as of which the forward-looking statements were made, except as required by law. Stockholders and investors are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in the Company’s filings and reports, including, without limitation, estimates and projections regarding the performance of development projects the Company is pursuing. For a detailed discussion of the Company’s risk factors, please refer to the Company's filings with the SEC, including this report and the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Ron Hubbard
Vice President, Investor Relations
P: 615.269.8290

Consolidated Balance Sheets

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA

ASSETS
	3Q 2025			2Q 2025			1Q 2025			4Q 2024			3Q 2024
Real estate properties
Land	$	1,066,616		$	1,105,231		$	1,134,635		$	1,143,468		$	1,195,116
Buildings and improvements		8,557,270			9,199,089			9,729,912			9,707,066			10,074,504
Lease intangibles		504,309			567,244			631,864			664,867			718,343
Personal property		6,854			6,944			9,938			9,909			9,246
Investment in financing receivables, net		123,346			124,134			123,813			123,671			123,045
Financing lease right-of-use assets		75,462			76,574			76,958			77,343			77,728
Construction in progress		—			40,421			35,101			31,978			125,944
Land held for development		57,203			49,110			52,408			52,408			52,408
Total real estate investments		10,391,060			11,168,747			11,794,629			11,810,710			12,376,334
Less accumulated depreciation and amortization		(2,381,297	)		(2,494,169	)		(2,583,819	)		(2,483,656	)		(2,478,544	)
Total real estate investments, net		8,009,763			8,674,578			9,210,810			9,327,054			9,897,790
Cash and cash equivalents		43,345			25,507			25,722			68,916			22,801
Assets held for sale, net		604,747			358,207			6,635			12,897			156,218
Operating lease right-of-use assets		209,291			243,910			259,764			261,438			259,013
Investments in unconsolidated joint ventures		458,627			463,430			470,418			473,122			417,084
Other assets, net 1		533,874			469,940			522,920			507,496			491,679
Total assets	$	9,859,647		$	10,235,572		$	10,496,269		$	10,650,923		$	11,244,585
LIABILITIES AND STOCKHOLDERS' EQUITY
	3Q 2025			2Q 2025			1Q 2025			4Q 2024			3Q 2024
Liabilities
Notes and bonds payable	$	4,485,706		$	4,694,391		$	4,732,618		$	4,662,771		$	4,957,796
Accounts payable and accrued liabilities		173,784			194,076			144,855			222,510			197,428
Liabilities of properties held for sale		69,808			30,278			422			1,283			7,919
Operating lease liabilities		166,231			203,678			224,117			224,499			229,925
Financing lease liabilities		72,654			73,019			72,585			72,346			71,887
Other liabilities		146,618			158,704			174,830			161,640			180,283
Total liabilities		5,114,801			5,354,146			5,349,427			5,345,049			5,645,238
Redeemable non-controlling interests		4,332			4,332			4,627			4,778			3,875
Stockholders' equity
Preferred stock, $0.01 par value; 200,000 shares authorized		—			—			—			—			—
Common stock, $0.01 par value; 1,000,000 shares authorized		3,516			3,516			3,510			3,505			3,558
Additional paid-in capital		9,134,486			9,129,338			9,121,269			9,118,229			9,198,004
Accumulated other comprehensive (loss) income		(6,461	)		(9,185	)		(7,206	)		(1,168	)		(16,963	)
Cumulative net income attributable to common stockholders		113,847			171,585			329,436			374,309			481,155
Cumulative dividends		(4,562,454	)		(4,477,940	)		(4,368,739	)		(4,260,014	)		(4,150,328	)
Total stockholders' equity		4,682,934			4,817,314			5,078,270			5,234,861			5,515,426
Non-controlling interest		57,580			59,780			63,945			66,235			80,046
Total equity		4,740,514			4,877,094			5,142,215			5,301,096			5,595,472
Total liabilities and stockholders' equity	$	9,859,647		$	10,235,572		$	10,496,269		$	10,650,923		$	11,244,585

1. 3Q 2025 Other assets, net includes $55.7 million of proceeds held in a cash escrow account from a portfolio disposition that closed on September 30, 2025 and was received by the Company on October 1, 2025.

Consolidated Statements of Income

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA

	3Q 2025			2Q 2025			1Q 2025			4Q 2024			3Q 2024
Revenues
Rental income	$	287,399		$	287,070		$	288,857		$	300,065		$	306,499
Interest income		3,480			3,449			3,731			4,076			3,904
Other operating		6,886			6,983			6,389			5,625			5,020
		297,765			297,502			298,977			309,766			315,423
Expenses
Property operating		113,456			109,924			114,963			114,415			120,232
General and administrative		21,771			23,482			13,530			34,208			20,124
Normalizing items 1		(12,046	)		(10,302	)		(502	)		(22,991	)		(6,861	)
Normalized general and administrative		9,725			13,180			13,028			11,217			13,263
Transaction costs		125			593			1,011			1,577			719
Depreciation and amortization		137,841			147,749			150,969			160,330			163,226
		273,193			281,748			280,473			310,530			304,301
Other income (expense)
Interest expense before merger-related fair value		(41,927	)		(42,766	)		(44,366	)		(47,951	)		(50,465	)
Merger-related fair value adjustment		(10,715	)		(10,580	)		(10,446	)		(10,314	)		(10,184	)
Interest expense		(52,642	)		(53,346	)		(54,812	)		(58,265	)		(60,649	)
Gain on sales of real estate properties and other assets		76,771			20,004			2,904			32,082			39,310
Loss on extinguishment of debt		(286	)		—			—			(237	)		—
Impairment of real estate assets and credit loss reserves		(104,362	)		(142,348	)		(12,081	)		(81,098	)		(84,394	)
Impairment of goodwill		—			—			—			—			—
Equity income (loss) from unconsolidated joint ventures		287			158			1			224			208
Interest and other income (expense), net		(2,884	)		(366	)		95			(154	)		(132	)
		(83,116	)		(175,898	)		(63,893	)		(107,448	)		(105,657	)
Net loss	$	(58,544	)	$	(160,144	)	$	(45,389	)	$	(108,212	)	$	(94,535	)
Net loss attributable to non-controlling interests		806			2,293			516			1,366			1,512
Net loss attributable to common stockholders	$	(57,738	)	$	(157,851	)	$	(44,873	)	$	(106,846	)	$	(93,023	)
Basic earnings per common share	$	(0.17	)	$	(0.45	)	$	(0.13	)	$	(0.31	)	$	(0.26	)
Diluted earnings per common share	$	(0.17	)	$	(0.45	)	$	(0.13	)	$	(0.31	)	$	(0.26	)
Weighted average common shares outstanding - basic		349,964			349,628			349,539			351,560			358,960
Weighted average common shares outstanding - diluted 2		349,964			349,628			349,539			351,560			358,960

1. Normalizing items primarily include restructuring, severance-related costs and non-routine advisory fees associated with shareholder engagement.
2. Potential common shares are not included in the computation of diluted earnings per share when a loss exists, as the effect would be an antidilutive per share amount. As a result, the outstanding limited partnership units in the Company's operating partnership ("OP"), totaling 4,253,989 units were not included.
   
   

Reconciliation of FFO, Normalized FFO and FAD 1,2,3

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA

	3Q 2025			2Q 2025			1Q 2025			4Q 2024			3Q 2024
Net loss attributable to common stockholders	$	(57,738	)	$	(157,851	)	$	(44,873	)	$	(106,846	)	$	(93,023	)
Net loss attributable to common stockholders/diluted share 3	$	0.17		$	(0.45	)	$	(0.13	)	$	(0.31	)	$	(0.26	)
Gain on sales of real estate assets		(76,771	)		(20,004	)		(2,904	)		(32,082	)		(39,148	)
Impairments of real estate assets		104,362			140,877			10,145			75,423			37,632
Real estate depreciation and amortization		143,187			152,936			155,288			164,656			167,821
Non-controlling loss from operating partnership units		(806	)		(2,293	)		(599	)		(1,422	)		(1,372	)
Unconsolidated JV depreciation and amortization		6,688			6,706			6,717			5,913			5,378
FFO adjustments	$	176,660		$	278,222		$	168,647		$	212,488		$	170,311
FFO adjustments per common share - diluted	$	0.50		$	0.79		$	0.48		$	0.60		$	0.47
FFO	$	118,922		$	120,371		$	123,774		$	105,642		$	77,288
FFO per common share - diluted	$	0.34		$	0.34		$	0.35		$	0.30		$	0.21
Transaction costs		125			593			1,011			1,577			719
Lease intangible amortization		(203	)		(222	)		(228	)		(2,348	)		(10	)
Non-routine legal costs/forfeited earnest money received		9			478			77			306			306
Debt financing costs 4		3,493			—			—			237			—
Restructuring and severance-related charges		12,046			10,302			502			22,991			6,861
Credit losses and gains (losses) on other assets, net 5		—			1,471			1,936			4,582			46,600
Merger-related fair value adjustment		10,715			10,580			10,446			10,314			10,184
Unconsolidated JV normalizing items 6		233			163			204			113			101
Normalized FFO adjustments	$	26,418		$	23,365		$	13,948		$	37,772		$	64,761
Normalized FFO adjustments per common share - diluted	$	0.07		$	0.07		$	0.04		$	0.11		$	0.18
Normalized FFO	$	145,340		$	143,736		$	137,722		$	143,414		$	142,049
Normalized FFO per common share - diluted	$	0.41		$	0.41		$	0.39		$	0.40		$	0.39
Non-real estate depreciation and amortization		114			207			222			404			276
Non-cash interest amortization, net 7		1,384			1,130			1,217			1,239			1,319
Rent reserves, net		146			130			94			(369	)		(27	)
Straight-line rent income, net		(5,899	)		(7,045	)		(6,844	)		(7,051	)		(5,771	)
Stock-based compensation		3,386			3,887			3,028			3,028			4,064
Unconsolidated JV non-cash items 8		(463	)		(356	)		(253	)		(277	)		(376	)
Normalized FFO adjusted for non-cash items	$	144,008		$	141,689		$	135,186		$	140,388		$	141,534
2nd generation TI		(9,398	)		(12,036	)		(14,885	)		(20,003	)		(16,951	)
Leasing commissions paid		(7,438	)		(5,187	)		(11,394	)		(11,957	)		(10,266	)
Building capital		(10,319	)		(9,112	)		(6,687	)		(8,347	)		(7,389	)
Total maintenance capex	$	(27,155	)	$	(26,335	)	$	(32,966	)	$	(40,307	)	$	(34,606	)
FAD	$	116,853		$	115,354		$	102,220		$	100,081		$	106,928
Quarterly dividends and OP distributions	$	85,536		$	110,486		$	109,840		$	110,808		$	113,770
FFO wtd avg common shares outstanding - diluted 8		354,690			354,078			353,522			355,874			363,370

1. Funds from operations (“FFO”) and FFO per share are operating performance measures adopted by NAREIT. NAREIT defines FFO as “net income (computed in accordance with GAAP) excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.”
2. FFO, Normalized FFO and Funds Available for Distribution ("FAD") do not represent cash generated from operating activities determined in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs. FFO, Normalized FFO and FAD should not be considered alternatives to net income attributable to common stockholders as indicators of the Company's operating performance or as alternatives to cash flow as measures of liquidity.
3. Potential common shares are not included in the computation of diluted earnings per share when a loss exists, as the effect would be an antidilutive per share amount.
4. Includes loss on debt extinguishment, loss on derivatives, and legal fees related to the amended credit facility.
5. Includes the Company's proportionate share of normalizing items related to unconsolidated joint ventures such as lease intangibles and transaction costs.
6. Includes the amortization of deferred financing costs, discounts and premiums, and non-cash financing receivable amortization.
7. Includes the Company's proportionate share of straight-line rent, net and rent reserves, net related to unconsolidated joint ventures.
8. The Company utilizes the treasury stock method, which includes the dilutive effect of nonvested share-based awards outstanding of 472,119 for the three months ended September 30, 2025. Also includes the diluted impact of 4,253,989 OP units outstanding.
   

Reconciliation of Non-GAAP Measures

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA - UNAUDITED

Management considers funds from operations ("FFO"), FFO per share, normalized FFO, normalized FFO per share, and funds available for distribution ("FAD") to be useful non-GAAP measures of the Company's operating performance. A non-GAAP financial measure is generally defined as one that purports to measure historical financial performance, financial position or cash flows, but excludes or includes amounts that would not be so adjusted in the most comparable measure determined in accordance with GAAP. Set forth below are descriptions of the non-GAAP financial measures management considers relevant to the Company's business and useful to investors.

The non-GAAP financial measures presented herein are not necessarily identical to those presented by other real estate companies due to the fact that not all real estate companies use the same definitions. These measures should not be considered as alternatives to net income (determined in accordance with GAAP), as indicators of the Company's financial performance, or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of the Company's liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of the Company's needs.

FFO and FFO per share are operating performance measures adopted by the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”). NAREIT defines FFO as “net income (computed in accordance with GAAP) excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.” The Company defines Normalized FFO as FFO excluding acquisition-related expenses, lease intangible amortization and other normalizing items that are unusual and infrequent in nature. FAD is presented by adding to Normalized FFO non-real estate depreciation and amortization, deferred financing fees amortization, share-based compensation expense and rent reserves, net; and subtracting maintenance capital expenditures, including second generation tenant improvements and leasing commissions paid and straight-line rent income, net of expense. The Company's definition of these terms may not be comparable to that of other real estate companies as they may have different methodologies for computing these amounts. FFO, Normalized FFO and FAD do not represent cash generated from operating activities determined in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs. FFO, Normalized FFO and FAD should not be considered an alternative to net income as an indicator of the Company’s operating performance or as an alternative to cash flow as a measure of liquidity. FFO, Normalized FFO and FAD should be reviewed in connection with GAAP financial measures.

Management believes FFO, FFO per share, Normalized FFO, Normalized FFO per share, and FAD provide an understanding of the operating performance of the Company’s properties without giving effect to certain significant non-cash items, including depreciation and amortization expense. Historical cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time. However, real estate values instead have historically risen or fallen with market conditions. The Company believes that by excluding the effect of depreciation, amortization, gains or losses from sales of real estate, and other normalizing items that are unusual and infrequent, FFO, FFO per share, Normalized FFO, Normalized FFO per share and FAD can facilitate comparisons of operating performance between periods. The Company reports these measures because they have been observed by management to be the predominant measures used by the REIT industry and by industry analysts to evaluate REITs and because these measures are consistently reported, discussed, and compared by research analysts in their notes and publications about REITs.

Cash NOI and Same Store Cash NOI are key performance indicators. Management considers these to be supplemental measures that allow investors, analysts and Company management to measure unlevered property-level operating results. The Company defines Cash NOI as rental income plus interest from financing receivables less property operating expenses. Cash NOI excludes non-cash items such as above and below market lease intangibles, straight-line rent, lease inducements, lease termination fees, financing receivable amortization, tenant improvement amortization and leasing commission amortization. Cash NOI is historical and not necessarily indicative of future results.

Same Store Cash NOI compares Cash NOI for stabilized properties. Stabilized properties are properties that have been included in operations for the duration of the year-over-year comparison period presented. Accordingly, stabilized properties exclude properties that were recently acquired or disposed of, properties classified as held for sale, properties undergoing redevelopment, and newly redeveloped or developed properties.

The Company utilizes the redevelopment classification for properties where management has approved a change in strategic direction through the application of additional resources, including an amount of capital expenditures significantly above routine maintenance and capital improvement expenditures.

Any recently acquired property will be included in the same store pool once the Company has owned the property for five full quarters. Newly developed or redeveloped properties will be included in the same store pool five full quarters after substantial completion.

FAQ

What were Healthcare Realty (HR) Q3 2025 core earnings metrics?

Q3 2025 results: NAREIT FFO $0.34, Normalized FFO $0.41, and FAD $116.9M (payout 73%).

How did same-store cash NOI perform for HR in Q3 2025?

Same-store cash NOI increased by +5.4%, driven by occupancy gains and +3.9% cash leasing spreads.

What guidance did Healthcare Realty (HR) update on October 30, 2025?

HR raised 2025 Normalized FFO guidance to $1.59–$1.61 per share and same-store cash NOI guidance to 4.00%–4.75%.

How much in asset sales did HR complete in Q3 2025 and YTD?

Completed $404 million in sales during Q3 through October and $486 million YTD at a blended 6.5% cap rate.

What is Healthcare Realty’s liquidity and leverage position as of October 2025?

Reported approximately $1.3 billion of liquidity and run-rate Net Debt to Adjusted EBITDA of 5.8x, expected 5.4x–5.7x by year-end.

When is HR’s next dividend payment and how much is it?

Board approved a common dividend of $0.24 per share payable on November 21, 2025 to holders of record on November 11, 2025.

How much leasing activity did Healthcare Realty report in Q3 2025?

The company executed 333 leases covering 1.6 million square feet with a 5.8-year weighted average lease term.