Healthcare Realty Trust Expands Nuveen JV, Bringing Total Year-to-Date Proceeds to Approximately $700 Million

Rhea-AI Summary

Healthcare Realty Trust (NYSE:HR) has expanded its joint venture (JV) with Nuveen Real Estate, contributing eight properties worth $193 million to a new 80/20 JV. This brings the total value of JVs with Nuveen to over $600 million. Year-to-date, HR has completed over $800 million in JV and asset sales transactions, generating approximately $700 million in proceeds at an average cap rate of 6.6%.

The company expects additional asset sales and JV transactions to increase total proceeds to over $1 billion. These funds will be used for accretive, leverage neutral share repurchases and existing capital commitments. The expansion demonstrates HR's progress towards its goal of generating more than $1 billion in capital and highlights the value of its national operating platform in the outpatient medical real estate sector.

Positive

• Expanded JV with Nuveen Real Estate, contributing 8 properties worth $193 million
• Year-to-date proceeds from JV and asset sales reached $700 million
• Average cap rate of 6.6% on transactions
• Expected to increase total proceeds to over $1 billion
• Funds to be used for accretive, leverage neutral share repurchases

Negative

• None.

Insights

Financial Analyst

Healthcare Realty Trust's expansion of its joint venture (JV) with Nuveen is a strategic move to unlock value from its property portfolio. The transaction, contributing eight properties for $193 million, brings their total JV value with Nuveen to over $600 million. This, combined with other asset sales, has generated $700 million in proceeds at a cap rate of 6.6%.

The secured financing for 40% of the contribution value indicates a conservative approach to leverage. The company's plan to use proceeds for share repurchases and existing commitments suggests a focus on shareholder value and maintaining financial flexibility. With additional transactions in the pipeline, potentially pushing proceeds over $1 billion, HR is demonstrating strong execution of its capital recycling strategy.

Real Estate Investment Expert

The expansion of Healthcare Realty Trust's JV with Nuveen is a positive indicator for the outpatient medical real estate sector. The 80/20 JV structure allows HR to maintain operational control while monetizing assets and reducing balance sheet risk. The 6.6% average cap rate suggests solid valuation for medical office buildings in the current market.

The company's ability to attract institutional capital, especially from a reputable partner like Nuveen, underscores the attractiveness of their portfolio and operational expertise. This JV strategy enables HR to benefit from property appreciation while generating immediate capital for strategic initiatives. The projected $1 billion in proceeds provides significant financial flexibility, potentially positioning HR for opportunistic acquisitions or development projects in high-growth markets.

NASHVILLE, Tenn., Sept. 03, 2024 (GLOBE NEWSWIRE) -- Healthcare Realty Trust Incorporated (NYSE:HR) completed the contribution of eight properties for $193 million in a joint venture with Nuveen Real Estate (“Nuveen”). The new 80/20 JV obtained secured financing for approximately 40% of the contribution value. This previously announced JV expansion brings the total value of JVs with Nuveen to over $600 million.

Year-to-date the Company has completed over $800 million of joint venture and asset sales transactions, which have generated approximately $700 million of proceeds at an average cap rate of 6.6%. The Company has additional asset sale and JV transactions under contract or LOI that are expected to increase proceeds to over $1 billion. Proceeds are expected to fund accretive, leverage neutral share repurchases and existing capital commitments.

“The expansion of our joint venture with Nuveen shows steady progress towards our goal of generating more than $1 billion in capital,” stated Todd Meredith, President and CEO. “The growing commitment from our JV partners reinforces the value of our leading national operating platform and underscores our ability to capitalize on the strength of the outpatient medical real estate sector. With abundant access to JV capital, we will continue to be opportunistic in generating proceeds and accretively allocating capital.”

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 nearly 675 properties totaling approximately 40 million square feet concentrated in 15 growth markets. Additional information regarding the Company can be found at www.healthcarerealty.com.

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, 2023 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

What is the total value of Healthcare Realty Trust's joint ventures with Nuveen Real Estate?

The total value of Healthcare Realty Trust's joint ventures with Nuveen Real Estate has exceeded $600 million following the recent expansion.

How much has Healthcare Realty Trust (HR) generated in proceeds from joint ventures and asset sales in 2024?

Healthcare Realty Trust has generated approximately $700 million in proceeds from joint ventures and asset sales year-to-date in 2024.

What is the average cap rate for Healthcare Realty Trust's (HR) recent transactions?

The average cap rate for Healthcare Realty Trust's recent joint venture and asset sales transactions is 6.6%.

How does Healthcare Realty Trust (HR) plan to use the proceeds from its transactions?

Healthcare Realty Trust plans to use the proceeds for accretive, leverage neutral share repurchases and to fund existing capital commitments.