Healthcare Realty Trust (HR) Generates $400M in Proceeds from Asset Sales and JVs

By Bobby Samwell • Wednesday, July 03 07:55 • Permanent Link

Healthcare Realty Trust Incorporated (NYSE: HR) has provided an update on its asset sales and joint venture (JV) momentum, revealing that it has generated approximately $400 million of proceeds from JV and asset sale transactions year-to-date.

Furthermore, the company has additional asset sale and JV transactions under contract or letter of intent (LOI) that are now expected to increase proceeds to over $1 billion. The majority of these transactions are anticipated to be completed in the third quarter of the year.

As per the announcement, KKR has committed up to an additional $600 million of capital to increase the potential value of its 80/20 JV with Healthcare Realty beyond the initial property contributions. In the near term, additional property contributions are expected to generate incremental proceeds for Healthcare Realty of approximately $100 million in August, thereby increasing the value of the JV to approximately $500 million.

Additionally, Healthcare Realty has expanded its existing JV relationship with Nuveen Real Estate, with an intended $400 million in asset contributions. In the first phase, which is expected to be completed in August, Healthcare Realty will contribute eight of its existing properties to the new Nuveen JV at a value of $193 million. Nuveen will fund a contribution equal to 80% of the equity value, with Healthcare Realty retaining a 20% equity interest and continuing to oversee day-to-day operations and leasing of the properties.

Todd Meredith, President and CEO of Healthcare Realty, emphasized that the company's top capital allocation priority is redeploying these proceeds to fund accretive, leverage-neutral share repurchases. He also expressed satisfaction in expanding the existing JV relationships, providing the company with proceeds in the current market environment and alternative sources of growth capital over the longer term.

As a result of these announcements, the company's shares have moved 0.0% on the market, and are now trading at a price of $16.41. Check out the company's full 8-K submission here.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.