Healthcare Realty Trust Announces Participation in Citi's 2025 Global Property CEO Conference and Provides Update on Rent Collection From Prospect Medical

Rhea-AI Summary

Healthcare Realty Trust (NYSE:HR) announced its participation in Citi's 2025 Global Property CEO Conference scheduled for March 3-4, 2025. The company has also provided an update regarding rent collection from Prospect Medical, which filed for Chapter 11 bankruptcy on January 11, 2025.

The REIT collected partial rent payments from Prospect Medical for January and February 2025, amounting to $0.4 million. Prospect Medical currently leases 81,000 square feet from Healthcare Realty, representing approximately $2.9 million in annual revenue. The company cautioned that there is no guarantee of recovering additional unpaid rent or timely reletting of any spaces rejected in bankruptcy.

Healthcare Realty, as the first and largest REIT specializing in medical outpatient buildings, maintains a portfolio of over 650 properties totaling 38.4 million square feet across 15 growth markets, primarily located around market-leading hospital campuses.

Positive

• Portfolio of 650+ properties with 38.4M sq ft in 15 growth markets
• Partial rent collection of $0.4M from bankrupt tenant

Negative

• Tenant Prospect Medical filed for Chapter 11 bankruptcy
• Risk of not recovering remaining rent from $2.9M annual lease
• Potential vacancy risk from bankruptcy lease rejection

Insights

REIT Financial Analyst

Healthcare Realty Trust's disclosure about Prospect Medical's bankruptcy situation warrants investor attention. The REIT has collected only $0.4 million in partial rent payments from Prospect for January-February 2025, following Prospect's Chapter 11 filing on January 11. This creates uncertainty around $2.9 million in annual revenue from Prospect's 81,000 square feet of leased space.

While this exposure represents a minimal portion of Healthcare Realty's extensive portfolio (650+ properties totaling 38.4 million square feet), the bankruptcy introduces several considerations for investors. First, there's no guarantee of recovering additional unpaid rent. Second, the bankruptcy process could result in lease rejections, potentially creating vacant space that requires releasing - a process that might face delays given the specialized nature of medical outpatient buildings.

For context, this situation affects less than 1% of Healthcare Realty's total square footage, suggesting material impact on overall operations. However, the situation highlights tenant credit risk even within healthcare real estate, which typically exhibits more stability than other commercial property types. The bankruptcy proceedings and potential space rejections could temporarily pressure occupancy rates and same-store NOI in affected properties.

Investors should monitor upcoming earnings calls for management commentary on backfilling strategies and whether this signals any broader concerns about tenant financial health across their portfolio. The geographic concentration of these affected properties will also influence how quickly the space could be released if necessary.

NASHVILLE, Tenn., Feb. 28, 2025 (GLOBE NEWSWIRE) -- Healthcare Realty Trust Incorporated (NYSE:HR) (“Healthcare Realty” or the “Company”) today announced that members of the Company’s management team will participate in Citi’s 2025 Global Property CEO Conference on March 3 – 4, 2025. The Company also published an updated investor presentation in advance of the conference and other upcoming investor meetings. The presentation is available at the Investor Relations section of the company’s website at https://investors.healthcarerealty.com/corporate-profile/.

Healthcare Realty also announced the partial collection of rent payments from Prospect Medical for the months of January and February 2025, totaling $0.4 million. As the Company has previously disclosed, Prospect Medical filed for Chapter 11 bankruptcy protection on January 11, 2025. Prospect leases 81,000 square feet from the Company, representing approximately $2.9 million of annual revenue. The Company can provide no assurance that it will be able to recover additional unpaid rent from Prospect Medical or timely relet space related to any leases rejected in bankruptcy.

About Healthcare Realty

Healthcare Realty is a real estate investment trust (REIT) that owns and operates medical outpatient buildings primarily located around market-leading hospital campuses. The Company selectively grows its portfolio through property acquisition and development. As the first and largest REIT to specialize in medical outpatient buildings, Healthcare Realty's portfolio includes over 650 properties totaling 38.4 million square feet concentrated in 15 growth markets. For more information regarding Healthcare Realty, visit www.healthcarerealty.com.

Investor Contact:
Ron Hubbard
Vice President, Investor Relations
P: 615.269.8290

In addition to the historical information contained within, the matters discussed in this press release may contain forward-looking statements that involve risks and uncertainties. These risks are discussed in filings with the Securities and Exchange Commission by Healthcare Realty, including its Annual Report on Form 10-K for the year ended December 31, 2024 under the heading “Risk Factors,” and in its Quarterly Reports filed thereafter and in the Company’s other SEC filings. Forward-looking statements represent the Company’s judgment as of the date of this release. The Company disclaims any obligation to update forward-looking statements.

FAQ

How much rent did Healthcare Realty (HR) collect from Prospect Medical in early 2025?

Healthcare Realty collected $0.4 million in partial rent payments from Prospect Medical for January and February 2025.

What is the annual revenue impact of Prospect Medical's lease for Healthcare Realty (HR)?

Prospect Medical's lease of 81,000 square feet represents approximately $2.9 million in annual revenue for Healthcare Realty.

When did Prospect Medical file for bankruptcy protection affecting Healthcare Realty (HR)?

Prospect Medical filed for Chapter 11 bankruptcy protection on January 11, 2025.

What is the current portfolio size of Healthcare Realty Trust (HR)?

Healthcare Realty owns over 650 properties totaling 38.4 million square feet across 15 growth markets.