HR 10-K & 10-Q changes, risk factors and insider trading
Healthcare Realty Trust Inc · NYSE · Real Estate Investment Trusts · CIK 1360604 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Largest changes
see in full comparisonOnAsJanuarypreviously11, 2025,disclosed, Prospect Medical Holdings (“Prospect”) filed petitions for relief under Chapter 11 of the U.S. Bankruptcy Code inthe U.S. Bankruptcy Court for the Northern DistrictJanuary ofTexas.2025. Prospectleasesleased approximately 80,912 square feet of space from theCompany,Company.accountingIn October 2025, a subsidiary of Hartford HealthCare (“Hartford Health”) was selected as the successful bidder forapproximatelythe$2.9Prospectmillionassetsofassociatedannualwithrentaltherevenue.Company’s Prospect leases. The Companymovedsignedto cash basis accounting for thesedirect leases with Hartford Heath totaling 65,477 square feet effective January 1, 2026 andrecordedretainedacertainrevenue reduction of $0.7 millionsublet intheadditionalfourth quarter.spaces. Therecan beis no assurance that the Company willrecover unpaid rent from Prospect orbe able to timely relet the remaining Prospect leased spacerelatedthattowasanynotrejectedassumedleases.by Hartford Health.
“As previously disclosed, on May 6, 2024, Steward Health announced that it had filed petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. Prior to the bankruptcy filing, Steward leased approximately 593,000 square feet of space from the Company, accounting for approximately 2.0% of the Company’s rental revenue. Leases for six buildings in Massachusetts totaling approximately 244,000 square feet were assumed in connection with the sale of Steward’s Massachusetts hospitals on or about September 30, 2024. …”see in full comparison
The Company performs an impairment review on its real estate properties every year. In addition, the Company assesses the potential for impairment of identifiable intangible assets and long-lived assets, including real estate properties and goodwill, whenever events occur or a change in circumstances indicates that the recorded value might not be fully recoverable. The decision to sell a property also requires the Company to assess the potential for impairment. The Company incurred impairment charges ofsee in full comparison$249.9$361.1 million in2024,2025,associatedrelatedwithto completed or planneddispositiondispositions,activity. Additionally, the Company recorded a goodwill impairment of $250.5 millionchanges in2024.holding periods or changes in property use. The Company may determine in future periods that an impairment has occurred in the value of one or more of its real estate properties or other assets. In such an event, the Company may be required to recognize an impairment which could have a material adverse effect on the Company’s consolidated financial condition and results of operations.
“The Company will pursue claims for outstanding rent of approximately $2.3 million against Steward in the bankruptcy court. However, there can be no assurance that the Company will recover unpaid rent from Steward be able to timely relet space related to rejected leases at similar rental rates, or otherwise offset lost revenue from Steward Health.”see in full comparison
Trends in the healthcare servicesee in full comparisonindustryindustry, including the impact of the One Big Beautiful Bill Act passed during 2025 that is subject of ongoing analysis, may negatively affect the demand for the Company’s properties, lease revenues and the values of its investments.
The Company has utilized and, in the future, may utilize forward equity agreements to secure pricing for equity capital needed at a later time. The Company currently has no forward equity agreements outstanding. In the event that we enter into forward equity agreements in the future and elect to settle any such forward equity agreement for cash and the settlement price is below the applicable forward equity price, we would be entitled to receive a cash payment from the relevant forward purchaser. Under Section 1032 of the Internal Revenue Code, generally, no gains and losses are recognized by a corporation in dealingsee in full comparisoninwith its own shares, including pursuant to a "securities futures contract" (as defined in the Internal Revenue Code, by reference to the Exchange Act). Although we believe that any amount received by us in exchange for our stock would qualify for the exemption under Section 1032 of the Internal Revenue Code, because it is not entirely clear whether a forward equity agreement qualifies as a "securities futures contract," the U.S. federal income tax treatment of any cash settlement payment we receive is uncertain. In the event that we recognize a significant gain from the cash settlement of a forward equity agreement, we might be unable to satisfy the gross income requirements applicable to REITs under the Internal Revenue Code. In that case, we may be able to rely upon the relief provisions under the Internal Revenue Code in order to avoid the loss of our REIT status. Even if the relief provisions apply, we will be subject to a 100% tax on the greater of (i) the excess of 75% of our gross income (excluding gross income from prohibited transactions) over the amount of such income attributable to sources that qualify under the 75% test or (ii) the excess of 95% of our gross income (excluding gross income from prohibited transactions) over the amount of such gross income attributable to sources that qualify under the 95% test, multiplied in either case by a fraction intended to reflect our profitability. In the event that these relief provisions were not available, we could lose our REIT status under the Internal Revenue Code.
Full comparison: every changed paragraph (18)
The Company's results of operations have been and will continue to be impacted negatively by the Steward Health and Prospect Medical bankruptcies.bankruptcy.
As previously disclosed, on May 6, 2024, Steward Health announced that it had filed petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. Prior to the bankruptcy filing, Steward leased approximately 593,000 square feet of space from the Company, accounting for approximately 2.0% of the Company’s rental revenue. Leases for six buildings in Massachusetts totaling approximately 244,000 square feet were assumed in connection with the sale of Steward’s Massachusetts hospitals on or about September 30, 2024. In October 2024, the Company received $2.2 million for prior rent owed under these assumed leases.
Leases for approximately 349,000 square feet in buildings in Florida and Massachusetts were rejected by Steward. The total annual revenue associated with the rejected leases was approximately $13.0 million.
The Company will pursue claims for outstanding rent of approximately $2.3 million against Steward in the bankruptcy court. However, there can be no assurance that the Company will recover unpaid rent from Steward be able to timely relet space related to rejected leases at similar rental rates, or otherwise offset lost revenue from Steward Health.
OnAs Januarypreviously 11, 2025,disclosed, Prospect Medical Holdings (“Prospect”) filed petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern DistrictJanuary of Texas.2025. Prospect leasesleased approximately 80,912 square feet of space from the Company,Company. accountingIn October 2025, a subsidiary of Hartford HealthCare (“Hartford Health”) was selected as the successful bidder for approximatelythe $2.9Prospect millionassets ofassociated annualwith rentalthe revenue.Company’s Prospect leases. The Company movedsigned to cash basis accounting for thesedirect leases with Hartford Heath totaling 65,477 square feet effective January 1, 2026 and recordedretained acertain revenue reduction of $0.7 millionsublet in theadditional fourth quarter.spaces. There can beis no assurance that the Company will recover unpaid rent from Prospect or be able to timely relet the remaining Prospect leased space relatedthat towas anynot rejectedassumed leases.by Hartford Health.
The Company performs an impairment review on its real estate properties every year. In addition, the Company assesses the potential for impairment of identifiable intangible assets and long-lived assets, including real estate properties and goodwill, whenever events occur or a change in circumstances indicates that the recorded value might not be fully recoverable. The decision to sell a property also requires the Company to assess the potential for impairment. The Company incurred impairment charges of $249.9$361.1 million in 2024,2025, associatedrelated withto completed or planned dispositiondispositions, activity. Additionally, the Company recorded a goodwill impairment of $250.5 millionchanges in 2024.holding periods or changes in property use. The Company may determine in future periods that an impairment has occurred in the value of one or more of its real estate properties or other assets. In such an event, the Company may be required to recognize an impairment which could have a material adverse effect on the Company’s consolidated financial condition and results of operations.
The Company has, and in the future may have more,more exposure to fixed rent escalators, which could lag behind inflation and the growth in operating expenses such as real estate taxes, utilities, insurance, and maintenance expense.
As of December 31, 2024,2025, the Company had investment concentrations of greater than 5% of its total investments in the Dallas, TX (8.5%9.5%), Seattle, WA (6.1%), Houston, TX (5.4%6.0%), and Seattle,Charlotte, WANC (5.2%5.4%) markets. These concentrations increase the exposure to adverse conditions that might affect these markets, including natural disasters, local economic conditions, local real estate market conditions, increased competition, state and local regulation (including property taxes) and other localized events or conditions.
The Company has acquired and may in the future acquire properties by issuing limited partnership units of the OP in exchange for a property owner contributing property to the Company. If the Company continues to enter into such transactions in order to induce the contributors of such properties to accept units of the OP rather than cash in exchange for their properties, it may be necessary for the Company to provide additional incentives. For instance, the OP's limited partnership agreement provides that any holder of units may exchange limited partnership units on a one-for-one basis for shares of common stock or, at the Company's option, cash equal to the value of an equivalent number of shares of the Company's common stock. The Company may, however, enter into additional contractual arrangements with contributors of property under which it would agree to repurchase a contributor’s units for shares of the Company's common stock or cash, at the option of the contributor, at set times. If the contributor required the Company to repurchase units for cash pursuant to such a provision, it would limit the Company's liquidity and, thus, its ability to use cash to make other investments, satisfy other obligations or make distributions to stockholders. Moreover, if the Company were required to repurchase units for cash at a time when it did not have sufficient cash to fund the repurchase, the Company might be required to sell one or more of its properties to raise funds to satisfy this obligation. Furthermore, the Company might agree that if distributions the contributor received as a limited partner in the OP did not provide the contributor with an established return level, then upon redemption of the contributor’s units the Company would pay the contributor an additional amount necessary to achieve that return. Such a provision could further negatively impact our liquidity and flexibility. Finally, in order to allow a contributor of a property to defer taxable gain on the contribution of property to the OP, the Company might agree not to sell a contributed property for a defined period of time or until the contributor exchanged the contributor’s units for cash or shares. Such an agreement would prevent the Company from selling those properties,properties or require the Company to indemnify the contributor for taxes if the Company did sell the properties.
Pandemics,Pandemics and measures intended to prevent their spread or mitigate their severity could have a material adverse effect on the Company's business, results of operations, cash flows and financial condition.
The Company's former Chief Executive Officer departed the Company in the second half of 2024. The Company's board of directors is currently conducting a search for a chief executive officer. While the board is actively engaged in the process and is utilizing a reputable national search firm, there can be no assurances as to the timing of the appointment of a CEO. Uncertainty concerning the appointment of a CEO could affect the Company's stock performance and its ability to attract, retain, and motivate key personnel needed to execute operational priorities.
As of December 31, 2024,2025, the Company had approximately $4.9$4.1 billion of outstanding indebtedness excluding discounts, premiums and debt issuance costs. Covenants under the FourthFifth Amended and Restated Revolving Credit and Term Loan Agreement dated as of July 20,25, 2022,2025, among Healthcare Realty Trust, the OP, and Wells Fargo Bank, National Association, as Administrative Agent, and the other lenders that are party thereto, as amended ("Unsecured Credit Facility"), and the indentures governing the OP's senior notes permit the Company to incur substantial, additional debt, and the Company may borrow additional funds, which may include secured borrowings or additional instances of notes by the OP that are fully guaranteed by Healthcare Realty Trust. The Company has approximately $1.5$1.3 billion of combined debt maturities in 20252026 and 2026.2027. A high level of indebtedness would require the Company to dedicate a substantial portion of its cash flows from operations to service debt, thereby reducing the funds available to implement the Company's business strategy and to make distributions to stockholders. A high level of indebtedness could also:
As of December 31, 2024,2025, the Company had investments of $473.1$453.6 million in unconsolidated joint ventures with unrelated third parties comprised of 6361 propertiesproperties, excluding held for sale properties, and seven parking garages. In addition, the Company had investments of $97.6 million in two consolidated joint ventures with developments that were completed in the fourth quarter of 2024. The Company may acquire, develop, or redevelop additional properties in joint ventures with unrelated third parties. In such investments, the Company is subject to risks that may not be present in its other forms of ownership, including:
The Company has utilized and, in the future, may utilize forward equity agreements to secure pricing for equity capital needed at a later time. The Company currently has no forward equity agreements outstanding. In the event that we enter into forward equity agreements in the future and elect to settle any such forward equity agreement for cash and the settlement price is below the applicable forward equity price, we would be entitled to receive a cash payment from the relevant forward purchaser. Under Section 1032 of the Internal Revenue Code, generally, no gains and losses are recognized by a corporation in dealing inwith its own shares, including pursuant to a "securities futures contract" (as defined in the Internal Revenue Code, by reference to the Exchange Act). Although we believe that any amount received by us in exchange for our stock would qualify for the exemption under Section 1032 of the Internal Revenue Code, because it is not entirely clear whether a forward equity agreement qualifies as a "securities futures contract," the U.S. federal income tax treatment of any cash settlement payment we receive is uncertain. In the event that we recognize a significant gain from the cash settlement of a forward equity agreement, we might be unable to satisfy the gross income requirements applicable to REITs under the Internal Revenue Code. In that case, we may be able to rely upon the relief provisions under the Internal Revenue Code in order to avoid the loss of our REIT status. Even if the relief provisions apply, we will be subject to a 100% tax on the greater of (i) the excess of 75% of our gross income (excluding gross income from prohibited transactions) over the amount of such income attributable to sources that qualify under the 75% test or (ii) the excess of 95% of our gross income (excluding gross income from prohibited transactions) over the amount of such gross income attributable to sources that qualify under the 95% test, multiplied in either case by a fraction intended to reflect our profitability. In the event that these relief provisions were not available, we could lose our REIT status under the Internal Revenue Code.
Even if the relief provisions apply, we will be subject to a 100% tax on the greater of (i) the excess of 75% of our gross income (excluding gross income from prohibited transactions) over the amount of such income attributable to sources that qualify under the 75% test or (ii) the excess of 95% of our gross income (excluding gross income from prohibited transactions) over the amount of such gross income attributable to sources that qualify under the 95% test, multiplied in either case by a fraction intended to reflect our profitability. In the event that these relief provisions were not available, we could lose our REIT status under the Internal Revenue Code.
In casethe event of our bankruptcy or insolvency, any forward equity agreements will automatically terminate, and the Company would not receive the expected proceeds from any forward sale of shares of its common stock.
Real property taxes on the Company's properties may increase as its properties are reassessed by taxing authorities or as property tax rates change. In addition, the Company could incur significant costs associated with an appeal of any of these assessments. For example, a current California law commonly referred to as Proposition 13 generally limits annual real estate tax increases on California properties to 2% of assessed value at the date of acquisition. Accordingly, the assessed value and resulting property tax the Company pays is less than it would be if the properties were assessed at current values. The Company owns 31 properties in California, representing 7.1%9.1% of its total revenue. From time to time, proposals have been made to reduce the beneficial impact of Proposition 13, particularly with respect to commercial property, which would include medical office buildings. MostIf recently,such an initiative qualified for California’s November 2020 statewide ballot that would generally limit Proposition 13’s protections to residential real estate. If this initiative had passed, it wouldcould haveend endedor reduce the beneficial effect of Proposition 13 for the Company's properties, and property tax expense could have increase substantially, adversely affecting the Company's cash flow from operations and net income. While this initiative did not pass, the Company cannot predict whether other changes to Proposition 13 may be proposed or adopted in the future.
Trends in the healthcare service industryindustry, including the impact of the One Big Beautiful Bill Act passed during 2025 that is subject of ongoing analysis, may negatively affect the demand for the Company’s properties, lease revenues and the values of its investments.
Management's Discussion & Analysis (MD&A)
New heading “Subsequent Repurchase Activity”
New heading “At-The-Market Equity Offering Program”
New heading “Subsequent Debt Activity”
New heading “Year Ended December 31, 2025 Compared to Year Ended December 31, 2024”
New heading “Debt extinguishment costs”
New heading “Interest and other income (expense)”
Removed heading “Investment in Unconsolidated Joint Ventures”
Removed heading “Subsequent Activity”
Removed heading “Other Items Impacting Operations”
Removed heading “Year Ended December 31, 2023 Compared to Year Ended December 31, 2022”
Largest changes
“There was no goodwill impairment in 2025. During the first quarter of 2024, the Company determined that the carrying value of its single reporting unit exceeded estimated fair value and therefore recorded a $250.5 million full impairment of its goodwill, which is recorded as a non-cash charge in “Impairment of goodwill” in the consolidated statements of operations. See Note 1 to the Consolidated Financial Statements accompanying this report for more details.”see in full comparison
“During the first quarter of 2024, the Company determined that the carrying value of its single reporting unit exceeded estimated fair value and therefore recorded a $250.5 million full impairment of its goodwill, which is recorded as a non-cash charge in “Impairment of goodwill” in the consolidated statements of operations. See Note 1 to the Condensed Consolidated Financial Statements accompanying this report for more details.”see in full comparison
“As previously disclosed, on May 6, 2024, Steward Health announced that it had filed petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. Prior to the bankruptcy filing, Steward leased approximately 593,000 square feet of space from the Company. Leases for six buildings in Massachusetts totaling approximately 244,000 square feet were assumed in connection with the sale of Steward’s Massachusetts hospitals on or about September 30, 2024. …”see in full comparison
The Company also performs an annual goodwill impairment review. The Company's reviews are typically performed as of December 31 of each year.see in full comparisonHowever,Induring2025, a review was not necessary as the Company's goodwill asset had a zero balance. During the first quarter of 2024, the Company experienced a sustained decline in the price per share of its common stock, which was identified as an indicator of goodwill impairment. As a result, a goodwill evaluation was performed. As of the measurement date, the Company's current operations are carried out through a single reporting unit that had a carrying value of approximately $12.0 billion. The Company determined that the carrying value exceeded estimated fair value and therefore an impairment of goodwill was recorded. The Company recorded a $250.5 million full impairment of its goodwill, which is recorded as a non-cash charge in “Impairment of goodwill” in the ConsolidatedStatementsStatement ofOperations.OperationsIn 2023, a review indicated that no impairment had occurred with respect tofor theCompany'syeargoodwillendedassetDecemberof31,$250.5 million.2024.
“As previously disclosed, Prospect filed petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in January of 2025. Prospect leased approximately 80,912 square feet of space from the Company. In October of 2025, a subsidiary of Hartford Health was selected as the successful bidder for the Prospect assets associated with the Company’s Prospect leases. The Company signed direct leases with Hartford Heath totaling 65,477 square feet effective January 1, 2026 and retained certain sublet in additional spaces. …”see in full comparison
“On January 11, 2025, Prospect Medical Holdings filed petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of Texas. Prospect leases approximately 80,912 square feet of space from the Company, accounting for approximately $2.9 million of annual revenue. The Company moved to cash basis accounting for these leases and recorded a reserve of $0.7 million in the fourth quarter. …”see in full comparison
Full comparison: every changed paragraph (169)
•The Company's results of operations have been and will continue to be impacted negatively by the Steward Health and Prospect Medical bankruptciesbankruptcy;
•The Company has, and in the future may have more,more exposure to fixed rent escalators, which could lag behind inflation and the growth in operating expenses such as real estate taxes, utilities, insurance, and maintenance expense;
•Pandemics,Pandemics and measures intended to prevent their spread or mitigate their severity could have a material adverse effect on the Company's business, results of operations, cash flows and financial condition; and
•In casethe event of our bankruptcy or insolvency, any forward equity agreements will automatically terminate, and the Company would not receive the expected proceeds from any forward sale of shares of its common stock.
•Trends in the healthcare service industryindustry, including the impact of the One Big Beautiful Bill Act passed during 2025 that is subject of ongoing analysis, may negatively affect the demand for the Company’s properties, lease revenues and the values of its investments;
As described in Item 1. Business above and elsewhere in this report, on July 20, 2022, Legacy HR and Legacy HTA completed a merger between the companies in which Legacy HR merged with and into a wholly-owned subsidiary of Legacy HTA, with Legacy HR continuing as the surviving entity and a wholly-owned subsidiary of Legacy HTA. Immediately following the Merger, Legacy HTA changed its name to “Healthcare Realty Trust Incorporated.” For accounting purposes, the Merger was treated as a “reverse acquisition” in which Legacy HR was considered the acquirer. Accordingly, the information discussed in this section reflects, for periods prior to the closing of the Merger, the financial condition and results of operations of Legacy HR, and for periods from the closing of the Merger, that of the Company.
The Company had no real estate acquisition activity for the year ended December 31, 2024.
Investment in Unconsolidated Joint Ventures
In 2024, the Company's investment in unconsolidated joint ventures increased by $172.7 million, as a result of the Company's contribution of medical outpatient properties to two joint ventures in which it holds a 20% interest.
•$52.4 million toward first generation tenant improvements and planned capital expenditures for acquisitions;
•$68.4$90.2 million toward secondfirst generation tenant improvements; and
•$46.9 million toward second generation tenant improvements; and
In 2025, the Company had the following activity on its real estate notes receivables:
•In January 2025, the Company received $14.9 million as payment towards the principal balance of its mortgage loan that matured on December 2, 2024.
•In March 2025, the Company provided seller financing of $5.4 million in connection with the sale of a real estate property in Houston, Texas.
•In March 2025, the Company executed a mezzanine loan receivable agreement with a maximum loan commitment of $8.5 million. As of December 31, 2025, the Company had funded the full $8.5 million under this agreement.
•In April 2025, a mortgage loan receivable of $37.7 million maturing in February 2026 was repaid in full.
•In December 2025, the Company received $5.8 million as payment towards the principal balance of its mortgage loan that matured on December 22, 2024,
•In December 2025, the Company provided seller financing of $6.4 million in connection with the sale of a real estate property in Houston, Texas.
On June 24, 2024, the Company's two mezzanine loans in Texas with a total principal balance of $54.1 million matured. On July 15, 2024, the senior lender on the construction mortgage loans associated with the underlying project initiated foreclosure proceedings to the borrower. In the third quarter of 2024, the Company recorded an allowance for credit loss of $46.8 million to cover the entire carrying amount for these loans. The Company had previously placed the mezzanine loans on non-accrual status in 2023. In the fourth quarter of 2024, the underlying project was sold, and the Company received $4.0 million as consideration for its mezzanine loan interests. The Company no longer has a mezzanine loan position in connection with the project.
In 2024, the Company placed one of its real estate notes receivable with a principal balance of $31.2 million on non-accrual status. The Company determined that the risk of credit loss was no longer remote and recorded a credit loss reserve of $16.8 million including $0.5 million of accrued interest in 2024. In January 2025, the underlying real estate collateral was sold and the Company received $14.9 million towards the principal balance of this loan.
The following table details the Company's asset sales and joint venture contributions for the year ended December 31, 20242025:
1The Company contributed the following medical outpatient properties to a joint venture in which the Company retained 20% ownership: one in each of Raleigh, NC, New York, NY, Philadelphia, PA, Atlanta, GA, Austin, TX, Miami, FL, Denver, CO, Memphis, TN, Indianapolis, IN, and Honolulu, HI; two MOBs in Los Angeles; three MOBs in Houston, TX and Dallas, TX; and five in Seattle, WA. Sale price and square footage reflect the total sale price paid by the joint venture and total square footage of the property. The net proceeds to the Company related to these dispositions totaled $584.9 million.
2The Company sold seven MOBs in Greensboro, NC and two non-clustered single-tenant MOBs in Raleigh, NC to a single buyer in a single transaction.
3The Company contributed the following medical outpatient properties to a joint venture in which the Company retained 20% ownership: one in each of Dallas, TX, San Antonio, TX and Atlanta, GA; and two MOBs in each of Nashville, TN and Denver, CO. Sale price and square footage reflect the total sale price paid by the joint venture and total square footage of the property. The net proceeds to the Company related to these dispositions totaled $148.9 million.
4The Company provided seller financing of approximately $9.6 million in connection with this sale.
5The Company sold an MOB that was included in a consolidated joint venture in which the Company held a 63% ownership interest. Proceeds include the Company's pro-rata share of the purchase price as well as amounts due to the Company by the joint venture.
6Includes1Includes two medical outpatient properties.
2The Company provided seller financing of approximately $5.4 million in connection with this sale.
7Includes3Includes threefour medical outpatient properties.
4Includes three medical outpatient properties.
5Includes six medical outpatient properties.
6The Company sold six MOBs in El Paso, TX, four MOBs in Indianapolis, IN, two MOBs in each of Chicago, IL, Cincinnati, OH, Des Moines, IA, Fort Wayne, IN, Minneapolis, MN and Pittsburgh, PA; and one MOB in each of Detroit, MI, Las Vegas, NV and Salt Lake City, UT to a single buyer in a single transaction.
7The Company provided seller financing of approximately $6.4 million in connection with this sale.
On FebruaryJanuary 7,14, 2025,2026, the Company disposed of a 30,30460,039 square foot medical outpatient building in Boston,Atlanta, MassachusettsGeorgia for $4.5$21.9 million.
On February 14, 2025, the Company disposed of two medical outpatient buildings in Denver, Colorado, with a combined total of 69,715 square feet for an aggregate purchase price of $8.6 million.
During 2024,2025, the Company repurchaseddid 30.8not millionrepurchase any shares of its common stock at an average price of $16.56 per share for a total of $509.8 million.stock. As of December 31, 2024,2025, the Company had $237.0$500.0 million ofremaining authorizedunder its current share repurchasesrepurchase remaining.authorization.
Subsequent Repurchase Activity
In January 2026, the Company repurchased 2.9 million shares of its common stock at an average price of $17.27 per share for a total of $50.0 million resulting in $450.0 million of authorized share repurchases remaining.
At-The-Market Equity Offering Program
On December 17, 2025, the Company renewed its ATM equity offering program to sell shares of the Company's common stock from time to time in at-the-market sales transactions. The Company entered into equity distribution agreements with various sales agents having an aggregate offering price of up to $1.0 billion. As of December 31, 2025, there has been no activity under the program.
During the year ended December 31, 2025, the Company repaid in full a mortgage note payable bearing interest at a rate of 4.25% that encumbered a 45,157 square foot property in California.
Senior Notes
During the year ended December 31, 2025, the Company repaid its Senior Notes due 2025 at maturity including $250 million of principal and $4.8 million of accrued interest.
The following table details the mortgage note repayment activity for the year ended December 31, 2024:
During 2024,the year ended December 31, 2025, the Company repaid itsthe $350$300 million Unsecured Term Loan,Loan due 2025January 2026, the $200 million Unsecured Term Loan due January 2026, and recognizedthe $150 million Unsecured Term Loan due June 2026 and recorded approximately $0.2$0.5 million of accelerated amortization expense included in the loss on extinguishment of debt.
Subsequent Activity
On January 7, 2025, the Company made a partial repayment of $25 million on its $200 million Unsecured Term Loan due 2025.
On January 14, 2025 the Company made a partial repayment of $10 million on its $300 million Unsecured Term Loan due 2025.
As of December 31, 2024,2025, the Company had seven outstanding interest rate derivatives totaling approximately$500 $1.1 billionmillion to hedge one-month Secured Overnight Financing Rate (“SOFR”). The following details the amount and rate of each swap as of such date (dollars in thousands):
Subsequent Debt Activity
In February 2026, the Company entered into a commercial paper dealer agreement to issue short-term commercial paper notes up to $600.0 million, with maturities up to 364 days. The program is back-stopped by the Unsecured Credit Facility. The notes will be issued at par less a discount representing an interest factor, or if interest bearing, at par.
3Debt instruments assumed as part of the Merger with Legacy HTA on July 20, 2022. The amounts shown represent fair value adjustments.
4As of December 31, 2024, the Company had no outstanding borrowings under the Unsecured Credit Facility with a remaining borrowing capacity of $1.5 billion.
The Company had no real estate acquisition activity for the year ended December 31, 2025.
In 2024, the Company completed no property acquisitions.
The Company disposed of 6770 properties in 20242025 for sales prices totaling $1.5approximately billion,$1.1 including 30 properties contributed into two joint ventures in which the Company maintains a non-controlling interest.billion. These transactions yielded net cash proceeds of $1.2approximately $1.0 billion, net of $67.3approximately $77.6 million of closing costs and related adjustmentsadjustments, and $172.7$11.8 million ofin retainedCompany jointfinanced venture interests.notes. The weighted average capitalization rate for these propertiessales was 6.6%.6.7%. The Company calculates the capitalization rate for dispositions as the in-place cash net operating income divided by the sales price.
The Company maintainsregularly discussionsconsults with health systems and developers regarding long-term future new development opportunities. In addition, the Company continually evaluates its portfolio for accretive redevelopment opportunities.
Steward Health
As previously disclosed, on May 6, 2024, Steward Health announced that it had filed petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. Prior to the bankruptcy filing, Steward leased approximately 593,000 square feet of space from the Company. Leases for six buildings in Massachusetts totaling approximately 244,000 square feet were assumed in connection with the sale of Steward’s Massachusetts hospitals on or about September 30, 2024. In October 2024, the Company received $2.2 million for prior rent owed under these assumed leases. Leases for approximately 349,000 square feet in buildings in Florida and Massachusetts were rejected by Steward. The total annual revenue associated with the rejected leases was approximately $13.0 million. The Company made significant progress re-leasing space previously occupied by Steward Health, with leases representing over 80% of the rejected Steward Health square feet.
What changed in the latest 10-Q
Risk Factors
There have been no material changes to our risk factors and other risks and uncertainties as described in Part I, "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Subsequent Disposition Activity”
New heading “Subsequent Joint Venture Acquisition Activity”
New heading “Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025”
New heading “Other Income (Expense)”
New heading “Gains on sale of real estate properties and other assets”
New heading “Interest expense”
New heading “Impairment of real estate properties and credit loss reserves”
New heading “Equity loss from unconsolidated joint ventures”
Largest changes
“Impairment of real estate properties and credit loss reserves”see in full comparison
“Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025”see in full comparison
“During the six months ended June 30, 2026, the Company recognized real estate impairments totaling $42.8 million on properties sold and properties with changes in the expected holding periods, net of a $1.0 million credit loss recovery on one of its previously settled mortgage notes receivable. During the six months ended June 30, 2025, the Company recognized impairments totaling $151.0 million on properties sold and properties with changes in the expected holding periods. …”see in full comparison
Full comparison: every changed paragraph (122)
As of MarchJune 31,30, 2026, the Company had $1.2$1.6 billion available to be drawn on the Delayed Draw Term Loan and Revolving Facility, net of Commercial Paper Program borrowings, and available cash.
Dividends paid by the Company for the three months ended March 31, 2026 were funded from cash flows from operations and the Revolving Facility, as cash flows from operations were not adequate to fully fund dividends, primarily as a result of the timing of interest payments. The Company expects that cash flows from operations will generate sufficient cash flows during 2026 such that dividends for the full year 2026 can be funded by cash flows from operations or other sources of liquidity described above.
Cash flows provided by operating activities increaseddecreased from $47.8$211.0 million for the threesix months ended MarchJune 31,30, 2025 to $52.9$195.1 million for the threesix months ended MarchJune 31,30, 2026. Items impacting cash flows from operations include, but are not limited to, cash generated from property operations, interest payments and the timing of the payment of invoices and other expenses.
Cash flows used in investing activities for the threesix months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, were approximately $45.3$52.3 million and $38.8$41.9 million, respectively. Below is a summary of the investing activities.
The Company had nothe following real estate acquisition activity for the threesix months ended MarchJune 31,30, 2026.2026:
Subsequent to March 31, 2026, the Company acquired the following property:
1.Represents ana additionalcondominium unit fully leased condominium unit, by Novant Health under a long-term lease in an existing building, bringing the Company's ownership of the building to 93%.
The Company disposed of three medical outpatientfive properties and one land parcel during the threesix months ended MarchJune 31,30, 2026 for a total sales price of $33.4$49.1 million, generating net proceeds of $30.0$44.6 million after closing credits. The following table details these dispositions for the threesix months ended MarchJune 31,30, 2026:
Subsequent Disposition Activity
On July 2, 2026, the Company sold two land parcels in Dallas, TX for a total purchase price of $5.5 million.
During the threesix months ended MarchJune 31,30, 2026, the Company incurred capital costs totaling $49.1$105.2 million for the following:
During the threesix months ended MarchJune 31,30, 2026, the Company invested additional funding of $18.6$19.0 million, of which $17.7 million related to a property acquisition, in existing joint ventures in which it holds a 20% interest.
Subsequent Joint Venture Acquisition Activity
In July 2026, an unconsolidated joint venture where the Company owns 20%, acquired two properties for a total purchase price of $86.1 million.
In April 2026, the Company entered into a mezzanine loan agreement to provide funding up to $6.3 million for a future development. As of June 30, 2026, no funding has been provided.
In April 2026, the Company received $45.2 million, upon maturity of a mortgage loan.
Cash flows used in financing activities for the threesix months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, were approximately $7.5$149.9 million and $52.1$212.3 million, respectively. See Notes 4 and 7 to the Condensed Consolidated Financial Statements in this report for more information about capital markets and financing activities.
On February 12, 2026, Healthcare Realty established its inaugural commercial paper program, with a total size of up to $600 million. As of MarchJune 31,30, 2026, the Company had a principal balance of $251.0$276.0 million outstanding.
On May 7, 2026, the OP issued $700.0 million of 3.00% 2032 Exchangeable Senior Notes. The proceeds from the offering were primarily used to repay the Company’s $600 million of Senior Notes that were due to mature in August 2026. In connection with the offering of the 2032 Exchangeable Senior Notes, the Company and OP entered into the 2032 Capped Calls with an initial cap price of $27.41 per share. A portion of the proceeds from the 2032 Exchangeable Senior Notes was used to pay the premiums of the 2032 Capped Calls of approximately $28.9 million, which was recorded as reduction to stockholders' equity. See Note 4 to the Condensed Consolidated Financial Statements in this report for more information.
On May 15, 2026, the Company and the OP (as borrower) entered into a term loan agreement (“The Term Loan Agreement”) which provides for a $400.0 million senior unsecured delayed draw term loan facility (the “Delayed Draw Term Loan”). The Term Loan Agreement has an accordion feature to increase the Delayed Draw Term Loan or add one or more new tranches of term loans up to an additional aggregate amount not to exceed $100.0 million, subject to the satisfaction of certain conditions and the receipt of additional commitments from existing or new lenders. The scheduled maturity date of the Delayed Draw Term Loan is May 15, 2029. Term loans outstanding under the Delayed Draw Term Loan will accrue interest at an annual rate equal to (a) the applicable margin, plus (b) at the OP’s option, (x) the base rate, (y) a forward-looking term rate based on the secured overnight financing rate (“SOFR”) as administered by the Federal Reserve Bank of New York (“Term SOFR”) or (z) a daily rate determined by reference to SOFR (“Daily Simple SOFR”), subject to a floor of, in the case of base rate, 1.00% and in the case of Term SOFR and Daily Simple SOFR, 0.00%. The applicable margin under the Term Loan Facility ranges from 0.00% to 0.550% for base rate loans and 0.675% to 1.550% for Term SOFR or Daily Simple SOFR loans, in each case, based on the non-credit enhanced, senior unsecured long-term debt ratings of the OP. Deferred financing costs incurred as a result of the transaction totaled approximately $4.1 million and are recorded as an other asset on the condensed consolidated balance sheet. As of June 30, 2026, no borrowings were outstanding under the Delayed Draw Term Loan.
In February 2026, the Company terminated three interest rate swaps with a total notional value of $400.0 million that were set to mature in 2026 and 2027. The Company entered into two new interest rate swaps with a total notional value of $400.0 million, at a strike price of 3.32%, that mature in January 2029. In May 2026, the Company had four interest rate swaps with a total notional value of $100.0 million mature.
As of MarchJune 31,30, 2026, the Company had sixtwo outstanding interest rate derivatives with notional values totaling $500.0$400.0 million to hedge the one-month term Secured Overnight Financing Rate ("SOFR"). at a rate of 3.32%. As of MarchJune 31,30, 2026, all sixboth of these swaps were designated as cash flow hedges. The following table details the amount and rate of each swap (dollars in thousands):
The Company expects that approximately 10-15% of its leases will expire each year in the ordinary course of business. There are 768329 multi-tenant and single-tenant leases totaling 2.20.9 million square feet that will expire during the remainder of 2026. Approximately 72%70% of the leases expiring during the remainder of 2026 are for space in buildings located on or adjacent to hospital campuses, are distributed throughout the portfolio, and are not concentrated with any one tenant, health system or market area. The Company typically expects to retain 75% to 90% of tenants upon expiration, and the retention ratio for the first threesix months of the year was within this range.
The Company historically has experienced increases in property taxes throughout its portfolio as a result of increasing assessments and tax rates levied across the country. The Company continues its efforts to appeal property tax increases and manage the impact of the increases. In addition, the Company historically has incurred variability in portfolio utilities expenses based on seasonality, with the first and third quarters usually reflecting greater amounts. The effects of these operating expense increases are mitigated in leases that have provisions for operating expense reimbursement. As of MarchJune 31,30, 2026, leases for approximately 92% of the Company's total leased square footage allow for some recovery of operating expenses, with approximately 30%28% having modified gross lease structures and approximately 62%64% having net lease structures.
2These purchase options have been exercisable for an average of 21.7approximately 22.0 years.
3Includes twoone medical outpatient propertiesproperty that areis recorded in the line item Investment in financing receivable, net on the Company's Condensed Consolidated Balance Sheets.
The table below reconciles net loss to FFO, Normalized FFO and FAD for the three and six months ended MarchJune 31,30, 2026 and 2025:
2 The Company utilizes the treasury stock method which includes the dilutive effect of nonvested share-based awards outstanding of 493,403613,021 and 317,511,287,797, respectively, for the three months ended MarchJune 31,30, 2026 and 2025, and the dilutive impact of 4,278,0284,247,299 and 4,262,579 OP Units outstanding for the three and six months ended MarchJune 31,30, 2026, respectively.
The following table reflects the Company's Same Store Cash NOI for the threesix months ended MarchJune 31,30, 2026 and 2025:
The following tables reconcile net income (loss) to Same Store NOI and the same store property metrics to the total owned real estate portfolio for the threesix months ended MarchJune 31,30, 2026 and 2025:
Three Months Ended MarchJune 31,30, 2026, Compared to Three Months Ended MarchJune 31,30, 2025
The Company’s results of operations for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025 were impacted by developments, dispositions, gain on sales and impairment charges recorded on real estate properties, and capital markets transactions.
Rental income decreased $21.3$16.5 million, or 7.4%,5.8%, for the three months ended MarchJune 31,30, 2026, compared to the prior year period. This decrease is primarily comprised of the following:
Other operating income increased $1.3$1.1 million, or 20.6%,15.0%, for the three months ended MarchJune 31,30, 2026, compared to the prior year period primarily as a result of income from management fees.
Property operating expenses decreased $9.8$5.2 million, or 9.0%,5.0%, for the three months ended MarchJune 31,30, 2026, compared to the prior year period primarily as a result of the following activity:
•Decreases in portfolio operating expenses as follows:
▪Property tax expense of $0.2 million; and
▪Other administrative and legal expenses of $0.2 million;
◦Utilities expense of $1.5 million;
◦Compensation expense of $0.9 million;
◦Maintenance and repair expense of $0.7$2.0 million; and
◦JanitorialAdministrative expenseand other legal costs of $0.1$1.5 million.million;
•Developments completed in 2025 resulted in an increase of $0.2 million.
General and administrative expenses increased approximately $3.8 million, or 28.2%, for the three months ended March 31, 2026, compared to the prior year period primarily as a result of the following activity:
•Increase in restructuring and severance-related charges of $7.1 million and non-cash incentive compensation expense of $0.9 million.
•Decreases in the following expenses:
•Cash compensation◦Compensation expense of $3.1$1.5 million;
◦Utilities expense of $1.0 million;
◦Property tax expense of $0.2 million;
◦Janitorial expense of $0.2 million; and
◦Insurance expense of $0.1 million.
◦Incentive based cash compensation expense of $0.4 million; and ◦Other decreases include legal and other administrative costs of $0.7 million.
Depreciation and amortization expense decreased $27.1 million, or 17.3%, for the three months ended March 31, 2026, compared to the prior year period primarily as a result of the following activity:
•Dispositions in 2025 and 2026 resulted in a decrease of $19.9 million.
•Assets that became fully depreciated resulted in a decrease of $17.3 million.
•Various building and tenant improvement expenditures resulted in an increase of $9.8 million.
General and administrative expenses decreased approximately $9.1 million, or 38.8%, for the three months ended June 30, 2026, compared to the prior year period primarily as a result of the following activity:
•Decrease in restructuring and severance-related charges of $8.4 million;
•Decreases in cash compensation expense of $2.1 million;
•Increase in non-cash incentive based cash compensation expense of $0.6 million;
HR insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 2 filings (2 insiders, 2 trade dates, 46,767 shares, about $926.2K). Net open-market shares: -46,767 (purchases minus sales); net value about -$926.2K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-08 | Hull Robert E |
Open-market sale | 21,000 | $19.11 | $401.3K |
| 2026-06-23 | Callaway Amanda L |
Open-market sale | 25,767 | $20.37 | $524.9K |
| 2026-05-19 | Bohjalian Thomas N |
Grant/award | 6,683 | $20.20 | $135.0K |
| 2026-05-19 | Henry David |
Grant/award | 6,683 | $20.20 | $135.0K |
| 2026-05-19 | Moore Constance B |
Grant/award | 6,683 | $20.20 | $135.0K |
| 2026-05-19 | Rufrano Glenn J |
Grant/award | 6,683 | $20.20 | $135.0K |
| 2026-05-19 | Wood Donald C |
Grant/award | 6,683 | $20.20 | $135.0K |
| 2026-04-14 | Scott Peter A |
Shares withheld for tax | 36,029 | $17.84 | $642.8K |
Well-known investors holding HR (13F)
None of the 59 investors we track reported a position in their latest 13F.