Executive Summary

Normalized FFO per share was $0.40, at the high end of guidance and up 2.5% YoY; GAAP diluted EPS was $(0.31) on impairments and credit loss reserves .
Same-store cash NOI grew 3.1% YoY (3.6% excluding Steward/Prospect) and multi-tenant absorption hit 140K SF in Q4; new leases signed reached a company record 686K SF .
2025 guidance introduced: Normalized FFO/share $1.56–$1.60, same-store cash NOI +3.00%–3.75%, and asset sales of $400–$500M with cap rates 6.8%–7.3%; proceeds prioritized for deleveraging to 6.0x–6.25x net debt/Adj. EBITDA by YE25 .
Catalyst: management reiterated a path to full dividend coverage by Q4 2025 or early 2026 and removed Prospect revenue from 2025 guidance, clarifying near-term cash flow trajectory and credit exposure .

What Went Well and What Went Wrong

What Went Well

“We did what we said we would do”: Q4 normalized FFO/share $0.40 (high end), and multi-tenant occupancy gains at the high end of FY24 guidance (+149 bps) .
Leasing momentum: 686K SF of new leases signed (single-quarter high), 1.534M SF commenced in Q4, retention 81.6% Q4 / 83.4% FY, cash leasing spreads 2.7% in Q4 .
Re-leasing progress: Over 80% of 593K SF Steward space re-leased; ~$19M of ~$27M Steward exposure replaced; 2025 SSS guidance excludes Steward/Prospect for cleaner core trend .

What Went Wrong

GAAP results remained loss-making: Q4 net loss attributable to common stockholders of $(106.8)M and diluted EPS $(0.31) driven by $(81.1)M real estate impairments and other charges; revenue declined YoY .
Credit/bankruptcy headwinds: Prospect Medical filed Chapter 11 in January; ~$2.9M annual revenue exposure fully excluded from 2025 guidance, pressuring near-term revenues .
FAD coverage below dividend: Q4 FAD $100.1M vs dividends/distributions $110.8M; management targets full coverage by late 2025/early 2026, implying interim headwind as proceeds are used to delever .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Revenues ($USD Millions)	$330.4	$315.4	$309.8
Rental Income ($USD Millions)	$322.1	$306.5	$300.1 (includes $0.7M Prospect reserve)
Net (Loss) Income Attributable to Common ($USD Millions)	$(40.5)	$(93.0)	$(106.8)
Diluted EPS ($USD)	$(0.11)	$(0.26)	$(0.31)
FFO per Share - Diluted ($USD)	$0.36	$0.21	$0.30
Normalized FFO per Share - Diluted ($USD)	$0.39	$0.39	$0.40
Same-Store Cash NOI Margin (%)	63.8%	63.1%	63.9%

YoY highlights: Revenues −6.2%; Normalized FFO/share +2.5%; Same-store cash NOI margin +10 bps .
QoQ highlights: Revenues −1.8%; FFO/share +$0.09; Normalized FFO/share +$0.01 .

Segment breakdown (same-store):

Segment (Same-Store Cash NOI)	Q4 2023 ($USD Thousands)	Q4 2024 ($USD Thousands)
Multi-tenant	$128,558	$132,122
Single-tenant	$36,509	$37,924
Joint Venture	$4,224	$4,420
Total Same-Store	$169,291	$174,466

KPIs:

KPI	Q3 2024	Q4 2024
Multi-tenant Occupancy (%)	86.5%	86.3%
Total Portfolio Occupancy (%)	88.3%	88.2%
Multi-tenant Absorption (SF)	158,720	140,182
New Leases Signed (SF)	431,000	686,000
Tenant Retention (%)	80.5%	81.6%
MOB Cash Leasing Spreads (%)	3.9%	2.7%
Net Debt / Adjusted EBITDA (x)	6.7x	6.4x
Cash ($USD Millions)	$22.8	$68.9
Revolver Availability ($USD Millions)	~$1,300	$1,500
Dividend per Share ($USD)	$0.31 (Nov 27 pay date)	$0.31 (Mar 19 pay date)

Non-GAAP adjustments and notable items:

Q4 included $(81.1)M real estate impairments and $10.3M merger-related fair value adjustment; rental income reduced by $0.7M Prospect reserve .
2024 included $250.5M goodwill impairment (Q1) and cumulative credit loss reserves; normalized FFO removes unusual items as detailed in reconciliation .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Earnings per Share ($)	FY 2025	N/A	$(0.28)–$(0.20)	New
NAREIT FFO per Share ($)	FY 2025	N/A	$1.44–$1.48	New
Normalized FFO per Share ($)	FY 2025	N/A	$1.56–$1.60	New
Same-Store Cash NOI Growth (%)	FY 2025	N/A	3.00%–3.75% (ex-Steward/Prospect)	New / methodology adjusted
MOB Cash Leasing Spreads (%)	FY 2025	N/A	2.0%–3.0%	New
Lease Retention Rate (%)	FY 2025	N/A	80%–85%	New
Asset Sales/JV Contributions ($M)	FY 2025	N/A	$400–$500	New
Disposition Cash Yield (Cap Rate)	FY 2025	N/A	6.8%–7.3%	New
Maintenance Capex ($M)	FY 2025	N/A	$120–$150	New
Net Debt / Adjusted EBITDA (x)	FY 2025 YE	N/A	6.00x–6.25x	New
Dividend per Share ($)	Q1 2025	N/A	$0.31 declared	Maintained

Notes: 2025 guidance excludes Prospect Medical revenue and excludes Steward from same-store to improve core visibility . Management does not plan to provide quarterly guidance in 2025; expect seasonal 1Q softness in SSS NOI and FFO/share .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
Leasing & Occupancy Momentum	432K SF new leases; MT occupancy up 112 bps YoY; retention 85.5%	431K SF new leases; MT occupancy +49 bps QoQ; retention 80.5%	Record 686K SF new leases; MT absorption 140K SF; retention 81.6%	Strengthening
Operational Efficiency & Margins	OpEx −0.9% YoY; same-store NOI +2.3% (+3.5% ex-Steward)	OpEx −1.5% YoY; same-store NOI +3.1%	Same-store NOI +3.1%; controllable expense −100 bps FY; margin 63.9%	Improving
Capital Allocation: Dispositions/JVs & Buybacks	~$400M proceeds; plan >$1B; repurchased 18.5M shares ($294.5M)	~$875M proceeds through Oct; repurchases $446.8M	~$1.3B proceeds in 2024; $510M repurchases; 2025 sales $400–$500M	Ongoing, more aggressive refinement
Deleveraging & Balance Sheet	Net debt/Adj. EBITDA 6.6x; term loan extension	6.7x; revolver availability ~$1.3B	6.4x; plan to reach 6.0x–6.25x by YE25; refinance 2026 in H2’25	Deleveraging priority
Steward/Prospect Exposure	Steward reserve $3.0M; SSS ex-Steward focus	Continued credit loss reserves; SSS +3.1%	80%+ Steward space re-leased; Prospect (81K SF/$2.9M) removed from 2025 guidance	Reducing credit risk
Washington/Regulatory	N/A	N/A	Watching administration; outpatient is lowest-cost care setting; potential tailwind	Neutral/monitor
Supply/Demand & Development	N/A	N/A	Lowest construction starts in a decade; strong health system demand for outpatient	Supportive backdrop

Management Commentary

Connie Moore, Interim CEO: “We did what we said we would do… normalized FFO per share in the fourth quarter was $0.40… multi-tenant occupancy gains… at the high end of our plan.”
Rob Hull, COO: “We finished the year with almost 2 million square feet of new signed leases… 349 leases for over 1.5 million square feet commenced during the fourth quarter… our operations team is firing on all cylinders.”
Austen Helfrich, CFO: “Same-store cash NOI was 3.1% for the fourth quarter… excluding… bankruptcies, 3.6%… We entered 2025 with strong momentum and are guiding to same-store absorption between 75 and 125 basis points… focus… on significant debt reduction.”
CFO on dividends: “Our goal… achieving full dividend coverage in the fourth quarter of ’25 or early ’26.”

Q&A Highlights

Dividend coverage and trajectory: Management reiterated late 2025/early 2026 coverage, noting leasing-driven TI spend can shift timing; FAD growth in back half of ’24 was >10% QoQ .
Capital recycling and cap rates: 2025 dispositions guided to $400–$500M, weighted to asset sales; cap rate range lifted to 6.8%–7.3% reflecting asset mix (non-core) .
Deleveraging/execution timeline: Revolver fully repaid; $250M bonds maturing May 2025 will be bridged on revolver; plan to start addressing 2026 maturities in H2’25; no prepayment penalties on term loans .
Guidance simplification: 2025 outlook focused on same-store and consolidated metrics; no multi-tenant specific guidance and no quarterly guidance due to seasonality and transaction timing .
Steward/Prospect: Neither is embedded in 2025 guidance; Prospect fully removed pending court process updates .

Estimates Context

We attempted to retrieve S&P Global consensus for Q4 2024 EPS and revenue, but estimates were unavailable due to data access limits (Daily Request Limit exceeded). As such, comparison to Wall Street consensus is not provided.
Implication: Use management’s guidance and normalized FFO performance as near-term anchors; estimates will likely adjust to reflect higher leasing activity, asset sale cadence, and Prospect exclusion .

Key Takeaways for Investors

Core growth intact: Same-store cash NOI +3.1% with margin stability; multi-tenant occupancy and leasing momentum should support 2025 NOI growth despite asset sales .
Balance sheet strategy: Expect near-term FFO headwinds as proceeds are prioritized to debt reduction, targeting 6.0x–6.25x by YE25; refinancing plan for 2026 maturities in H2’25 reduces duration risk .
Credit events addressed: Steward re-leasing largely complete; Prospect fully excluded from guidance, improving visibility on core run-rate .
Capital recycling: $400–$500M non-core dispositions at 6.8%–7.3% cap rates refine footprint toward higher-growth, higher-margin markets .
Dividend path: Management aims for full coverage by Q4 ’25/early ’26; monitor FAD progression versus leasing capital needs and disposition timing .
Trading lens: Near-term catalysts include announced asset sales, occupancy gains from “snow” pipeline (~160 bps unoccupied signed leases), and clarity on CEO appointment; watch Q1 seasonality commentary .
Risk factors: Execution on asset sales and re-leasing, interest rate trajectory impacting refinancing costs, and bankruptcy proceedings timelines remain key watch items .

Appendix: Additional Data

Balance sheet highlights (Q4 2024):

Total assets $10.651B; Notes and bonds payable $4.663B; Cash $68.9M; Total equity $5.301B .
Liquidity: $1.5B revolver availability; Net debt $4.826B; Fixed-rate debt ~99.9% net of cash .

Dividend:

Q1 2025 dividend of $0.31/share payable March 19, 2025; OP unit distribution equivalent .

Leadership/Governance:

Interim CEO Connie Moore; CFO Austen Helfrich appointed permanent; board refresh with Independent Chair Tom Bohjalian and new directors; CEO search underway .

Healthcare Realty Trust Inc (HR)·Q4 2024 Earnings Summary