National Healthcare Properties, Inc. (formerly Healthcare Trust, Inc.) has announced significant developments in its second quarter 2024 results and its strategic initiatives. The company has entered into a definitive agreement to internalize its management, which is expected to result in annual savings of more than $25 million. The internalization will bring about self-management of the company by its executive team, leading to substantial cost reductions.
In the second quarter, the company closed on the disposition of one shop asset for $3.3 million and subsequently disposed of a portfolio of seven properties at a sale price of $50.5 million. Furthermore, it has an additional eight medical office building (MOB) and one shop asset in its disposition pipeline, estimated to fetch a total of $78.7 million.
The company's adjusted funds from operations (AFFO) improved by 13.8% year-over-year from $3.8 million in Q2 2023 to $4.4 million in Q2 2024. Additionally, the net operating income (NOI) for the shop segment improved by 10.1% year-over-year, while the NOI for the MOB segment improved by 1.9% over the same period.
National Healthcare Properties, Inc. has a high-quality portfolio, with 207 properties that are 74% MOB and 26% shop. The MOB portfolio is geographically diversified across 29 states and features long-term net leases to credit-worthy tenants with an average annual base cash rent escalation of 2.3% on approximately 94% of leases. The shop portfolio, on the other hand, has shown resilience with significant occupancy upside and operates in four states.
The company's balanced capital structure includes $828.3 million of fixed-rate mortgages notes payable and various credit facilities, demonstrating its commitment to maintaining a conservative net leverage of 44.5%.
National Healthcare Properties, Inc. is dedicated to enhancing corporate governance and is focused on a strategic disposition initiative to enhance its portfolio composition and operating performance. The internalization of management and the strong financial and operational performance indicate the company's commitment to positioning itself for a listing of its common stock on a national securities exchange. Following these announcements, the company's shares moved 0.7%, and are now trading at a price of $15.29. For the full picture, make sure to review Healthcare Trust's 8-K report.
