Healthcare Realty Trust Incorporated Stock Price: Quote, Forecast, Splits & News (HR)

Healthcare Realty Trust Incorporated

Overview

Financials

Historical Data

$15.18

+$0.13

0.86%

At close: Jun 20, 4:00:03 PM EDT

$15.18

$0.00

After hours: 5:05:00 PM EDT

Financial information provided by Financial Modeling Prep. Options data provided by Unusual Whales. Live transcripts provided by Quartr. Reported revenue and EPS data from Earnings powered by FinChat.io. All data is provided for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice.

Market Cap: $5.3B
IPO Date: 5/27/93
CEO: Mr. Peter A. Scott
Fulltime Employees: 550
Sector: Real Estate
Industry: REIT - Healthcare Facilities
Country: US
Exchange: New York Stock Exchange

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$0.00

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$0.00

Healthcare Realty Trust Incorporated Stock Price: Quote, Forecast, Splits & News (HR)

Change

+$0.13

0.86%

Financial Profile

Prev Close

$15.05

Market Cap

$5.33B

Day Range

$15.03 - $15.23

Open

$15.12

P/E Ratio

-13.6

52W Range

$14.09 - $18.90

24H Volume

$97.95M

Dividend Yield

8.17%

EPS

-1.12

Key Issues

Latest Price Movement

Jun 22

Earnings

Report Date

—

Rev Estimate

—

Avg 1d Change

2.63%

Report Period

Q1 2025

EPS Estimate

—

Implied Move 1d

—

Transcript

10m 37s

Additional information about the material factors assumptions, risks and uncertainties that could cause actual results to differ materially from the statements in the forward looking information and the material factors or assumptions that may have been applied and may such statements together with details on H and R's use of non GAAP financial measures, are described in more detail in H and R's public filings, which can be found on HandR'swebsiteandwww.sedarplus.com. I would now like to introduce Mr. Tom Hofstetter, Chief Executive Officer of H and R Please go ahead, mister Hofstetter. Good morning, everyone, and thanks for joining us. CFO, to give you highlights of the quarter and Larry will then pass on to Emily Watson, our unless stated otherwise, are in reference to the three months ended 03/31/2025, compared to the three months ended 03/31/2024. In 2024, we sold $429,000,000 of real estate assets [indiscernible] of 2025 we sold eight retail assets for $60,000,000 70% of our real estate assets by value are now in The United States. Overall, given the pandemic we face with multiple multi family supply concerns and the weak office markets, inflation as well as the tariff war creating general market uncertainty, we are very pleased with our results and in particular the 4.4% growth in the same property net operating income on a cash basis.

12m 26s

Breaking this down between our segments, we have the Prudential segment semi property net operating income on a cash basis decreased by point 8% in U. S. Dollars. The new supplier added in our residential markets is being absorbed. The public immigration trend has continued and our tenants are also staying longer. Emily will provide more details shortly. Now after the segment, segment property net operating income and a cash basis increased 1.2% primarily due to the strengthening of the U. S. Dollar. There has been a slate of back to the office policies from different companies and it seems clear that more and more employees are heading back to office which is positive of the second as a whole. Now Arthur's portfolio of 60 properties which includes four properties properties with residential rezoning opportunities now only comprises 18% eighty seven point eight percent of our office revenue from investment grade tenants. A testament to the quality and location of our office properties. Our office occupancy at 03/31/2025 was 96.7% with an average remaining lease term of five point eight years. Our retail portfolio at 03/31/2025 comprises 15% of HMRS overall portfolio of high value. Retail segment same property NOI net operating income increased 8.2% due to occupancy gains at River Landing and Forest.

14m 10s

And portfolio has been very stable. Industrial segment same income increased 4.5% and the actual portfolio of 65 properties at 03/31/2025 comprises 18% of and R's total real estate assets by value continues to perform well. In terms of announcement of H and R's strategic plan, H and R's average Canadian industrial rents increased from $7.17 per foot as at 06/30/2021 to $9.52 per square foot as a result 03/31/2025. In addition, industrial properties located in the GTA made up the 9% of H and R's industrial portfolio as of 06/30/2021. Compared to 69% of H and R's industrial portfolio as of 03/31/2025. Headline FFO units for Q1 twenty Q1 twenty twenty four. We are pleased with these results as we have sold $489,000,000 of real estate assets since 01/01/2024. Our balance sheet remains strong. Data total assets at the REIT proportion of shares on 03/31/2025, was 44.1% and debt to EBITDA was a healthy 9.3 times Liquidity at 03/31/2020 was in excess of $870,000,000 with an unencumbered property pool of approximately $4,500,000,000 unencumbered assets are unsecured debt coverage ratio was 2.3 times at 03/31/2025. And with that, I will turn the call over to Emoni.

16m 2s

Thanks, Larry, and good morning, everyone. Today, I'm happy to share our first quarter performance for our multifamily and some operational highlights. Our first quarter results have aligned with our expectations, Our multiple multifamily platform continues to benefit from strong demand as evidenced by stable resident retention, and a delta to homeownership. Additionally, continued job and wage growth further demonstrates strengthening drivers for our industry. Rather than opining on headlines, remain focused on the fundamentals of our business and continue to create NOI expansion through our repositioning opportunities and other innovative value add strategies that add to our bottom line. Given the declining levels of new supply ahead, and growing demand in our market, we are well positioned for substantial growth and value creation in coming years. Same property net operating income from residential properties in US dollars decreased by 82 basis points for three months ending 03/31/2025 compared to the respective 2024 period. Primarily due to a decrease in average rental rate and higher property operating costs from H and R Sunbelt properties This was partially offset by rental growth from H and R's Gateway City property. Same asset occupancy ended the quarter at 94.4%, a 60 basis point decrease over the fourth quarter and no change Q1 of twenty twenty four.

17m 34s

Same asset occupancy in the Sunbelt decreased 70 basis points in Q1 to 93.7% over the fourth quarter, Jackson Park was 98.9% occupied 75% retention. The Sun Belt continues to show strong demand metrics as supply deliveries have passed their peak. Our Sunbelt resident retention was 57% in Q1 and achieved a 60% resident retention in April. Blended lease trade outs for the Sunbelt markets were negative 2.1% in the first quarter. An improvement of three eighty basis points over fourth quarter and Q2 blended trade outs are positive 10 basis points to date. These results demonstrate the worst is behind us, we will continue to see improvement as supply decreases throughout the year. Based on a third party appraisal and a handful of Sunbelt sales comps, we have maintained our fair market value Sunbelt cap rates of 4.96 and believe the rate is appropriate and supported. Cap rates are expected to remain low, relatively speaking, for institutional quality assets in the Sunbelt with capital flows interested and focused on long term heavy Sun Belt multi multifamily allocation. On the development front, Lantower West Love in Dallas Texas continues to lease well despite the record level deliveries in Dallas. The community is currently 65.4% occupied and 70% leased.

19m 6s

The property was completed on time and on budget. Also in Dallas, Texas, Land Tower Midtown is currently 58.6% occupied and 62.6% leased. Both properties are leasing well with an average monthly velocity of 24 leases per month. Which is above industry report for our market and a testament to the superior product and unparalleled amenities our development team has delivered. Midtown was also completed on time and on budget. Reddit properties are progressing well and remain on budget with completion expected mid twenty twenty six. Land Tower currently has an additional nine development projects in the Sunbelt Pipeline totaling over 2,900 suites at H and R's ownership interest with multiple sites ready and prepared for construction. We are progressing through different phases of design, drawing, and permitting on the remainder of our Sunbelt development pipeline and currently have four projects fully permitted. In summary, Land Tower's platform has demonstrated remarkable resilience and performance relative to our peers. Our teams have navigated supply challenges and remained laser focused on innovative practices, including centralization, property wide Wi Fi opportunities, and AI applications that enhance NOI margins and continue to yield positive results. I want to extend my gratitude for our incredible teams whose dedication to excellence and innovation has been pivotal in achieving these outcomes.

20m 42s

And with that, I pass along the conversation to Tom. [indiscernible] Thank you. Are we ready for questions at this time?

20m 56s

Yes, we are. Thank you. Ladies and gentlemen, we will now begin the question and answer session. And if you are using a speakerphone, please lift the handset before pressing any keys. The first question comes from Mario Saric at Scotiabank. Please go ahead.

21m 25s

Hi, good morning. Just maybe starting off with Emily at Lantower. Can you just I may have missed the numbers, but can you just go through what the blended lease spreads were in Q1 where they kind of stand so far in Q2, and what the expectation is in terms of them becoming sustainably positive. Timing wise. Going forward?

21m 48s

Good morning, Mario. That's a great great question. So our same store blended trade outs were negative 1.4 with the new lease negative 7.3 and renewals were 3.3. For the Sunbelt specifically, the new lease trade outs were negative 5.6 which was improvement. It was 13.8% in the fourth quarter. And renewals were 3.3 which is an increase from 2.2% in the fourth quarter. So the blend in Sunbelt alone were negative 2.1 compared to a negative 5.9. So you know, I we are positive 10 basis points for the Sunbelt as of yesterday. So, we still have some headwinds ahead of us on the supply Supply is expected to be about 75,000 units in 'twenty five. With pretty heavily in Q1 and Q2 and then drops off in Q3 and Q4. So I still maintain that I think we'll still come in a little bit negative in Q2 and that we'll start seeing positive in and Q4.

23m 2s

Got it. Okay. So no no real change from the view three months ago?

23m 6s

No. You know, our our renewals are a little bit better than what I had anticipated. And retention is better. I'm real pleased with the 60% retention in April. So and we've already closed out April above a 3% renewal and we have four and it's still really early for our May, mean, for our June renewals, but they're coming in at around 5%.

23m 32s

So so definitely see momentum picking up. But still in the same cadence that I had originally anticipated that Q3 and Q4 are going to be really where we've seen some pickup.

23m 46s

Got it. Okay. My second question is maybe just for Tom on capital recycling, specifically asset sales. I think in the press release, kind of highlighted perhaps the desire to do more transaction volume. But, you know, Larry, kind of listed up my rate of factors that may be preventing that in the short term. So can you just give us an update in terms of what your thoughts are and whether anything's changed with respect to timing on echo, like Hess and some of the other initiatives that you have in the pipeline?

24m 14s

There's no news on Hess as far as the Chevron Hess issue goes. We expect it to go to the courts in June with a resolution sometime in September. We're looking to put that behind us. I think what the market doesn't like about that is the uncertainty. Once there's certainty, we can actually then go forward with something. We can sell it at that point in time. Until that point in time we really can't do anything. Nothing new on there. Nothing new on Echo. Echo is still we're still planning to go forward as it was previously We're not going to push sales into this illiquid world right now. Think the summer is going to be very, very sleepy overall. And we'll look to September to see if there's a little more vitality, a little more awakeness to the market and then resume some sales.

24m 59s

In in your view, what are kind of the one or two top macro factors that are driving liquidity in the market and what are you looking Well, illiquidity in the market, there's no debt or equity. So let's start there. In order to have a sale, need both of them. And you can't have equity without debt and you can't have debt without equity. So both of have to wake up. I think that Trump created with his tariffs a coal pile of uncertainty in the market that's primarily obviously industrial and office. And until that's a little bit settled down I think there's going to be people going to be reluctant to go ahead and jump into industrial or office. So think you need a little bit more visibility than what's what's going on in The United States. And geopolitical as well. Therefore, I expect as I said had to December, not a whole lot to happen. And hopefully, we look to September where people will want to start doing business again. And hopefully, it will be more of a positive But overall, the situation not only in Canada, everywhere is very, very lethargic right now. It's a wait and see game to see what happens geopolitical and the tariffs and recession and interest rates and everything else that's out there.

26m 6s

Okay. All makes sense. Thanks, Tom. Thank you.

26m 11s

Thank you. The next question comes from Sumayya Syed at CIBC Capital Markets. Please go ahead. Thanks. Good morning. Firstly, on land tariffs, it sounds like there was eventually, there was improvement there. I saw some reference in addition to the lower rent commentary around some higher operating costs. I'm just wondering what's the outlook there and were the costs just higher on seasonality or something else there?

26m 41s

Great question. So not really.

26m 44s

In Q1 of twenty four, we had well, I should say in Q4 of 'twenty three, we overestimated the bad debt and a lot more people paid in Q1 than what we had anticipated or Q4 than what we anticipated. So it was really a reversal Our bad debt, so it shows an increase in bad debt, but our bad debt in Q1 was 53 basis points. Which we were really pleased with. So that was part of it. We also had a little bit higher payroll costs due to, well, a couple of things. One, we usually run about 7% vacant open positions. And we've been running about 4%. So that kind of good news is that we are more fully staffed than what we have had in the past, as well as bonus attainment. Was a little higher in Q1 than what it was in Q1 of last year. [indiscernible] nothing that I think will be that concerns me. At all. Our NOI margins are still 59%, 60%. [indiscernible] I think what we're doing is working. But not anything that I'm concerned with. Rental rates, supply driven, so we are seeing more concessions in the market that will burn off which kind of pleased that people are seeing the optimism in what's coming ahead in Q3 and Q4. [indiscernible] nothing I'm concerned about and kind of aligned with our expectations.

28m 17s

Okay, got it. And then just moving on, to the retail exit strategy, maybe a question for Tom. So besides ECHO, you have about $600,000,000 of other retail, and putting aside River Landing, the remaining assets I guess, appear to be more liquid and in demand. What will be the outlook for disposing of that bucket? And could that be more near term than resolving echo?

28m 43s

We don't look to sell that on bulk So we look to do the same program we did with our oil facilities in The United States. We've been selling them gradually over the past few years, one at a time, achieving solid pricing. Those assets are worth more on a one off basis, so we could look to start to program of selling them it's not going to be hundred million or $400,000,000 of sales at one time. I don't think that's the right way to go with that portfolio.

29m 12s

Okay. Got it.

29m 13s

Thank you. I'll turn it back.

29m 16s

Thank you.

29m 19s

Thank you. The next question comes from Matt Kornack at National Bank Financial. Please go ahead.

29m 24s

Good morning, guys. And just we've talked lot about the supply picture The U. S. Multifamily space. But just interested in your view on demand and the drivers. I know, obviously, there's been a lot of interstate migration to the Sun Belt. But how should we think, I mean, rates are high, so presumably homeownership is not necessarily an alternative. But are are you fully expecting that the demand will be stable as the supply comes off to drive kind of that inflection.

29m 55s

Good morning, Matt. I do. In fact, Q1 set a record for Q1 demand nationally. So the in our respective markets, absorbed 28,000 units and projected 86,000 for the year. So just to put some perspective around that, our all of our Sunbelt markets in 'twenty four absorbed 98,000. So for 28,000 in Q1, we were really encouraged by that. And we see the momentum picking up in in different areas. So I don't we still have people that are relocating headquarters to Dallas. [indiscernible] So we're not subjected really to the port anything that happens with the tariffs in Houston. So I I definitely anticipate the demand to and so do the economists You know, you probably read the same headlines that I do, but yeah, we we are seeing things that are supporting the forecasted demand in all of our Sunbelt markets. And it's still a 60% discount to if you were owned your own home in our market. So that's a pretty big delta, but you still see delay in marriage and having babies and all of those fundamentals are ringing true. So I don't see anything that would suggest otherwise that demand's not gonna be sustainable.

31m 32s

Are you still there?

31m 35s

What portion of that would be destined redevelopment versus the stuff that you'd be trying to kinda renew tenants? Or if it is destined for redevelopment, would you try to renew on a short term basis at this point?

31m 48s

Matt, I'm sorry, I missed half your question because the phone cut out. Do you mind repeating it?

31m 53s

Oh, but it it was on office. So, Emily, you're you're you're Okay.

31m 56s

Okay. Looks like I'm good.

31m 58s

Oh, I think we Matt, we all missed the question. What was that? Oh, okay.

32m 2s

I I just I was looking at your, lease maturity profile, you do have about a million square feet of office maturities over the next two years in Canada. And just wondering how much of that would be desk destined for redevelopment versus releasing. And if it is destined for redevelopment, at this point, you kind of trying to renew people on a short term basis as opposed to letting those go vacant.

32m 28s

So there is no residential market to speak of so we're looking to renew them on a short term basis over the sale of [indiscernible] That will be applicable to the leases that are rolling in Front Street the leases that are rolling in United States, and the Hess that will be we're negotiating right now with tenants and we have completed some of those leases. That's going to be released. That's not such a great balance. And Bouchard, which is 2026, that is not that's for redevelopment that will not be released. That may be extended by Bell as they need stay on a little longer, but we're not looking to release that building.

33m 2s

Okay. So you wouldn't expect a material increase in in in the office portfolio in the near term? At this point.

33m 9s

No. The what I just mentioned. Yeah. 140 sorry. You have Front Street. Which, again, that'll be till it's released, it's vacant. And you have Bouchard, which is 2026, which will stay vacant. 145 Wilmington, which is slated for ultimate redevelopment that's ten years plus down the road. So that's not that's going to be released. There's nothing there anyhow, though. Just mentioning it as footnote to the fact that it's a residential redevelopment. And Hess, as I mentioned, is 2026, that will be released. [indiscernible] There's the leasing up and then the CIS and commissions.

33m 42s

So it takes time.

33m 44s

Okay. Enough.

33m 45s

Makes sense.

33m 50s

Thank you. The next question comes from Jimmy Shan at RBC Capital Markets. Please go ahead.

33m 56s

Thanks. So just first on the HPC industrial lease, it looks like there's a decent amount of upside here. So what the sequence of events from here and what's the prospect of facing that space?

34m 10s

When you get the space back.

34m 13s

I think within a matter of weeks subject to the courts and releasing we're already talking to potentials. The releasing is strong and the rental rate my guess is will be $14 ish something like that.

34m 30s

Okay.

34m 32s

We're already in negotiations with potential tenants. Don't that's not going be a problem, child. That'll lease. So a little bit of a downtime. And then probably probably sometime in the back half of the year.

34m 43s

Yeah.

34m 43s

Fair. That's a real yes. Okay. So on echo, I noticed in q one the NOI dropped a decent amount from [indiscernible] I was wondering is there some seasonality there? Would account for that drop?

35m 6s

Good morning, Jimmy. I didn't I'll have to get back to you on that one. There wasn't anything substantial at we saw from there. I think if you're looking at it just be careful when you're looking at it to back out the IFRIC '21 because we would have accrued royalty taxes for the whole year. In the ECO portfolio. So maybe looking at it [indiscernible] back that out? Yeah. That that might be it. Yeah. Okay.

35m 31s

Okay. And then on still on echo, Tom, think you mentioned you're not gonna push your sale. Have you tried to push a sale? In the last few months and then when you're thinking about potentially putting it in the market, September, are you looking to sell just your LP interest or could the entire portfolio be [indiscernible] considered for sale?

35m 53s

So we haven't put it on the market. It's still we haven't even we haven't awarded yet to an banker. To proceed with. We are having discussions with potential candidates in that regard. It will be we don't know really. We're going to put it out there and you'll see where you land. You'll see if there's an interest for our interest there's an interest somebody coming in. Taking our interest in treasury It could be anywhere where the best deal lies. So 100% everything's on the table.

36m 20s

Okay. And again, timing wise, you're thinking probably the fall.

36m 25s

I don't really know. It's not market conditions driven. It's just getting all of their Again, there's many, many investors you can look at as a public company. So it's not just it's not H and R definitely saying let's go and it's not necessarily the Board saying go. They appreciate the fact there's like I would say close to 500 investors family multiple family investors. This is a a company that's probably 130 years old. There's many, many layers of family. So till they get all their votes and all the every their ducks in a row, I can't really control the timing. So if I don't want to say fall. It's hard to that level of surety. But in the near future, in the foreseeable future, I expect it to happen.

37m 7s

Not as anxious it to happen as you may be. It's a solid company and he'll have no debt on on when Couche Tard finally closed that transaction, he'll have zero debt.

37m 18s

Its sales are very, very strong. We have total visibility to each store how it's doing. It's primarily grocery anchored. There's no There's no risk over here whatsoever. So it's not a burning issue for me to it. The only reason I'm selling it is if you guys keep on asking the question. When am I selling it? If I had my choice, wouldn't sell So stop asking, I won't sell it. [indiscernible] And then just last question, remind me again, I know you talked about it you get a $400,000,000 debenture coming up What was the plan again on the debenture?

37m 53s

Jeremy, we plan to use our bank client pay it off. We're just trying to divide our time to see what sales will come down the pipe. We haven't mentioned Jimmy, is we have the Caledon lens where they have future. Highway extension and that's going to happen has to happen. They have to go the highway. That's not really market driven. It's really and not dictated by us. It's dictated by the government. My guess it will happen sooner rather than later. And that's a significant amount of money that can come in. And that would solve this answer to this question. When we have more visibility on this decision, we are talking to the government in that regard. That's going to that's why we're that's why we are procrastinating on that debenture issue. I expect that [indiscernible] going to have to make a decision sooner rather than later. But again, are in discussions and have better visibility. If we don't, then obviously we'll just we'll roll into a new unsecured.

38m 44s

Okay. And what would be rough quantum? Would it be half of the debenture amount?

38m 49s

You're talking about a minimum of 150 of proceeds, minimum.

38m 56s

Okay. Okay.

39m

Thanks.

39m 2s

Thank you.

39m 5s

Thank you. We have no further questions. I will turn the call back over to Tom Hofstadter for closing comments.

39m 10s

Thank you everybody for joining us. Have a great day.

39m 13s

Bye.

39m 15s

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.

Key Insights

H&R sold $489 million of real estate assets since January 1, 2024, with 70% of its portfolio value now in the United States; balance sheet remains strong with liquidity over $870 million and a debt to EBITDA ratio of 9.3x as of March 31, 2025.
Same property net operating income (NOI) on a cash basis grew 4.4% overall, with retail segment NOI up 8.2% due to occupancy gains, industrial segment NOI up 4.5%, and office occupancy at 96.7% with an average lease term of 5.8 years.
Multifamily (residential) segment saw a slight decrease in same property NOI (down 82 basis points YoY in USD), mainly due to lower average rental rates and higher operating costs in Sunbelt properties, but retention and renewal rates are improving, with positive momentum expected in Q3 and Q4 2025.
H&R continues to execute on its development pipeline, particularly in the Sunbelt, with several projects leasing above market velocity and additional projects in various stages of permitting and design; cap rates for Sunbelt multifamily assets remain low and supported by strong institutional demand.
Management expects limited transaction activity over the summer due to market illiquidity and macro uncertainty (tariffs, interest rates, geopolitical factors), with potential asset sales and portfolio actions likely resuming in the fall; no material near-term increase in office vacancy is expected, and a $400 million debenture may be repaid using bank lines or proceeds from anticipated land sales.

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Earnings

Report Date

—

Rev Estimate

—

Avg 1d Change

2.63%

Report Period

Q1 2025

EPS Estimate

—

Implied Move 1d

—

Transcript

10m 37s

12m 26s

14m 10s

16m 2s

17m 34s

19m 6s

20m 42s

And with that, I pass along the conversation to Tom. [indiscernible] Thank you. Are we ready for questions at this time?

20m 56s

21m 25s

21m 48s

23m 2s

Got it. Okay. So no no real change from the view three months ago?

23m 6s

23m 32s

So so definitely see momentum picking up. But still in the same cadence that I had originally anticipated that Q3 and Q4 are going to be really where we've seen some pickup.

23m 46s

24m 14s

24m 59s

26m 6s

Okay. All makes sense. Thanks, Tom. Thank you.

26m 11s

26m 41s

Great question. So not really.

26m 44s

28m 17s

28m 43s

29m 12s

Okay. Got it.

29m 13s

Thank you. I'll turn it back.

29m 16s

Thank you.

29m 19s

Thank you. The next question comes from Matt Kornack at National Bank Financial. Please go ahead.

29m 24s

29m 55s

31m 32s

Are you still there?

31m 35s

31m 48s

Matt, I'm sorry, I missed half your question because the phone cut out. Do you mind repeating it?

31m 53s

Oh, but it it was on office. So, Emily, you're you're you're Okay.

31m 56s

Okay. Looks like I'm good.

31m 58s

Oh, I think we Matt, we all missed the question. What was that? Oh, okay.

32m 2s

32m 28s

33m 2s

Okay. So you wouldn't expect a material increase in in in the office portfolio in the near term? At this point.

33m 9s

33m 42s

So it takes time.

33m 44s

Okay. Enough.

33m 45s

Makes sense.

33m 50s

Thank you. The next question comes from Jimmy Shan at RBC Capital Markets. Please go ahead.

33m 56s

Thanks. So just first on the HPC industrial lease, it looks like there's a decent amount of upside here. So what the sequence of events from here and what's the prospect of facing that space?

34m 10s

When you get the space back.

34m 13s

I think within a matter of weeks subject to the courts and releasing we're already talking to potentials. The releasing is strong and the rental rate my guess is will be $14 ish something like that.

34m 30s

Okay.

34m 32s

34m 43s

Yeah.

34m 43s

Fair. That's a real yes. Okay. So on echo, I noticed in q one the NOI dropped a decent amount from [indiscernible] I was wondering is there some seasonality there? Would account for that drop?

35m 6s

35m 31s

35m 53s

36m 20s

Okay. And again, timing wise, you're thinking probably the fall.

36m 25s

37m 7s

Not as anxious it to happen as you may be. It's a solid company and he'll have no debt on on when Couche Tard finally closed that transaction, he'll have zero debt.

37m 18s

37m 53s

38m 44s

Okay. And what would be rough quantum? Would it be half of the debenture amount?

38m 49s

You're talking about a minimum of 150 of proceeds, minimum.

38m 56s

Okay. Okay.

39m

Thanks.

39m 2s

Thank you.

39m 5s

Thank you. We have no further questions. I will turn the call back over to Tom Hofstadter for closing comments.

39m 10s

Thank you everybody for joining us. Have a great day.

39m 13s

Bye.

39m 15s

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.

Key Insights

H&R sold $489 million of real estate assets since January 1, 2024, with 70% of its portfolio value now in the United States; balance sheet remains strong with liquidity over $870 million and a debt to EBITDA ratio of 9.3x as of March 31, 2025.
Same property net operating income (NOI) on a cash basis grew 4.4% overall, with retail segment NOI up 8.2% due to occupancy gains, industrial segment NOI up 4.5%, and office occupancy at 96.7% with an average lease term of 5.8 years.
Multifamily (residential) segment saw a slight decrease in same property NOI (down 82 basis points YoY in USD), mainly due to lower average rental rates and higher operating costs in Sunbelt properties, but retention and renewal rates are improving, with positive momentum expected in Q3 and Q4 2025.
H&R continues to execute on its development pipeline, particularly in the Sunbelt, with several projects leasing above market velocity and additional projects in various stages of permitting and design; cap rates for Sunbelt multifamily assets remain low and supported by strong institutional demand.
Management expects limited transaction activity over the summer due to market illiquidity and macro uncertainty (tariffs, interest rates, geopolitical factors), with potential asset sales and portfolio actions likely resuming in the fall; no material near-term increase in office vacancy is expected, and a $400 million debenture may be repaid using bank lines or proceeds from anticipated land sales.