Q3 2025 Healthcare Realty Trust Inc Earnings Call

October 31, 2025

To answer session.

To ask a question at this time, you will need to press star followed by the number one on your telephone keypad.

As a reminder, this conference call is being recorded.

I would now like to turn the call over to Ron Hubbard, Vice President of Investor Relations. Thank you. Please go ahead Sir.

Thank you for joining us today for healthcare Realty's third quarter 2025 earnings conference call.

Minor that except for the historical information contained within the matters discussed in this call may contain forward looking statements that involve estimates assumptions risks and uncertainties.

These forward looking statements represent the company's judgment as of the date of this call the.

The company disclaims any obligation to update this forward looking material.

A discussion of risks and risk factors are included in our press release and detailed in our filings with the SEC.

Certain non-GAAP financial measures will be discussed on this call.

Reconciliation of these measures to the most comparable GAAP financial measures may be found in the company's earnings press release for the quarter ended September 32025.

The earnings press release and earnings supplemental information are available on the company's website.

Now I'd like to turn the call over to our President and CEO Pete Scott.

Thanks, Ron.

Joining me on the call today are Rob Hall, our COO and often helfrich our CFO.

Also available for the Q&A portion of the call is Ryan Crowley our CIO.

I wanted to open with some important feedback on the strategic plan.

During the course of the third quarter, we met with over 100 investors across trip to Chicago, New York City, Boston and the mid Atlantic.

With the dividend decision behind us.

One of the meetings differ dramatically from earlier in the year.

Excitement around our strategic plan is palpable and the value creation opportunity is significant.

The challenge ahead of us as simple to exceed our three year growth framework.

To that end, we are assessing every possible opportunity to improve earnings and the hard work is already manifesting into better results.

Over the last two quarters same store NOI growth has averaged five 5% same store occupancy has increased 180 basis points.

And net debt to EBITDA has been reduced by half a turn.

We are also becoming increasingly more positive on the tailwind for healthcare Realty first the secular trends in outpatient medical continued to improve with demand far exceeding supply for.

For the 17th straight quarter occupancy increased across the top 100, metros and is approaching 93% an all time record.

Second our new leasing pipeline continues to grow and stands at $1 1 million square feet. Two thirds of our pipeline is in the LOI or lease documentation phase, indicating a high probability of completion.

Third with our improved occupancy levels, we can push harder on lease economics are.

Our primary focus is no longer on volume, but on economic returns as we seek to maximize retention escalators and cash leasing spreads.

Fourth with our rapidly improving leverage profile for the first time in years, we have capital to invest accretively into our portfolio and we are quickly building up dry powder to go back on offense.

Fifth with the progress we've made on our strategic dispositions our portfolio is uniquely concentrated within the largest and fastest growing msas.

When combined with our exceptional health system alignment. These key portfolio attributes should lead to superior operating performance in the quarters and years ahead.

Turning to the third quarter, we delivered excellent results with contributions across the platform.

But the financial rigor we are instilling in the organization. We are quickly shifting from a company that fell short of expectations to accompany that is exceeding them.

Normalized <unk> was <unk> 41 per share we raised both our <unk> and same store guidance.

And for the first time since early 2022 net debt to adjusted EBITDA is below six times.

A special thanks to the entire healthcare Realty team for their extraordinary efforts this quarter.

We followed up a win in the second quarter with a win in the third quarter that is not an easy thing to do and the team rose to the challenge.

Turning to the transaction market.

As evidenced by recent activity the transaction market for outpatient medical is heating up.

A variety of factors are contributing to this including improving sector fundamentals are favorable lending market.

<unk> strong health system appetite to own strategic real estate.

The combination of these favorable dynamics are driving cap rate compression.

We are benefiting from these improving trends and we have reduced the midpoint of the expected cap rate on our dispositions by 25 basis points.

We are nearing completion of our lofty disposition initiatives year to date, we have sold $500 million of assets at a blended cap rate of six 5%.

Our remaining disposition pipeline totaling approximately $700 million is almost entirely under binding contract or LOI.

By our next earnings call, we expect to have closed on the vast majority of our remaining dispositions with.

With every completed transaction our go forward NOI growth profile improved as demonstrated by our strong same store growth results this quarter.

In addition, with the potential for excess balance sheet capacity by year end, we are monitoring the transaction market for select external investment opportunities that are both strategic to our portfolio and accretive to earnings.

We wanted to elaborate more on the cap rates achieved on dispositions.

Two thirds of our dispositions or approximately $800 million are what we would characterize as non core assets.

We define non core assets as those located in non priority market with suboptimal operating performance and significant capital needs.

Non core assets also include a few legacy office properties.

The blended cap rate for these assets is 7.25%.

The other one third of our dispositions for $400 million are what we would characterize as core disposition assets, we define core disposition assets as those with good operating performance and high occupancy.

But are located in markets, where we have limited scale and or an inability to achieve meaningful scale.

The blended cap rate for this subset of assets is 575%.

A good example of a core disposition as our six asset Richmond, Virginia portfolio, which we are under binding contract to sell with an expected mid November closing.

We received unsolicited interest in this portfolio and opted to run a full sales process to maximize value.

Final pricing was $171 million or roughly $425 per square foot, achieving a high 5% cap rate.

Richmond is one of our few remaining markets, where we utilized third party property management, and we did not see an opportunity to grow our market share.

With an occupancy rate above 93% average building age of nearly 30 years and strong tenancy. We believe the cap rate on this portfolio is a good representation of the value embedded within our remaining stabilized portfolio.

Turning now to our development and redevelopment platform.

We have two projects in our active development pipeline. The all Saints two project in Fort worth, Texas that is anchored by Baylor Scott <unk> White.

And are making pond project in Raleigh, North Carolina that is anchored by UNC Rex health.

They all seem to project is now 72% leased up from 54% last quarter and we recently placed the project into service.

To make in pawn project is 51% pre leased.

And we expect to place the project into service in mid 2026.

Stabilized NOI from these two projects is expected to be approximately $8 million, providing a source of near term upside.

We see significant opportunity to harvest meaningful upside in our portfolio through targeted ROI driven investments.

During the third quarter.

Added five assets into our redevelopment portfolio with a total budget of approximately $60 million.

These assets are in strong Submarkets and include Nashville, Seattle, Denver, Charlotte and Dallas.

The incremental NOI from these five project is also expected to be nearly $8 million.

In the coming quarters, we expect to have more assets enter the redevelopment pool as we seek to accelerate our capital spend and potential earnings upside.

You will note that we enhanced our development and redevelopment disclosures in the supplemental.

We have also included a table of our current non income producing land parcels.

We owned strategic land parcels in key markets, such as Denver, White Plains, Atlanta, Nashville, and Austin with annual carry cost of approximately $1 $5 million.

We are in the process of assessing each parcel to determine if it makes sense to continue to hold or monetize.

In finishing we are incredibly excited about the future at healthcare royalty to point out.

Our operating performance is steadily improving our.

Our transition to an operations oriented culture is happening faster than anticipated.

Please wait for the next.

Hello. Good day. Thank you for standing by me I have any must've conference, you're calling to John Please.

Our balance sheet initiatives are nearly complete.

We are accelerating capital spend into our existing portfolio and we are rebuilding much needed credibility with the investor community.

I'm very sorry, do you have the conference I'd number.

On my first earnings call I said, we have one overarching objective.

One moment.

Healthcare Realty.

Yeah.

To be the first choice for equity investors when they are seeking exposure to outpatient medical.

May I know your first and last name.

Okay.

The only pure play outpatient medical REIT, our undivided attention allows us to singularly focus on this objective every day.

Yeah.

Joining me now.

Yeah.

One overarching objective.

To be the first choice for equity investors when they are seeking exposure to outpatient medical.

Let me turn the call over to Rob who will expand more on operations and leasing.

As the only pure play outpatient medical REIT, our undivided attention allows us to singularly focus on this objective every day.

Thanks Pete.

We had an exceptional quarter on the operations front.

Leasing activity was strong with $1 6 million square feet of executed leases.

Let me turn the call over to Rob who will expand more on operations and leasing.

Including over 441000 square feet of new leases.

Thanks Pete.

We had an exceptional quarter on the operations front.

Tenant retention increased to nearly 89%.

Leasing activity was strong with $1 6 million square feet of executed leases.

The highest in six years, and our sixth consecutive quarter over 80%.

Including over 441000 square feet of new leases.

And annual escalators of three 1% and prove the average across our total portfolio.

Tenant retention increased to nearly 89%.

Our activity this quarter contained several notable deals with some of our top health system partners.

The highest in six years, and our sixth consecutive quarter over 80%.

As examples of 21000 square foot lease was signed with Baptist Memorial in Memphis.

And annual escalators of three 1% and prove the average across our total portfolio.

21000 square feet of new leases.

An 18000 square foot lease was executed with Baylor, Scott and white at our on campus development in Fort worth.

Our activity this quarter contained several notable deals with some of our top health system partners.

Tenant retention increased to nearly 89%.

The highest in six years, and our sixth consecutive quarter over 80%.

As examples of 21000 square foot lease was signed with Baptist Memorial in Memphis.

And a 25000 square foot renewal was completed with multi care at our building on the overlay hospital campus in Seattle.

And annual escalators of three 1% improved the average across our total portfolio.

An 18000 square foot lease was executed with Baylor, Scott and white at our on campus development in Fort worth.

The backdrop for industry fundamentals remained strong.

Our activity this quarter contained several notable deals with some of our top health system partners.

Supporting further growth in our $1 1 million square foot lease pipeline.

And a 25000 square foot renewal was completed with multi care at our building on the overlay hospital campus in Seattle.

As examples of 21000 square foot lease was signed with Baptist Memorial in Memphis.

This quarter demand in the top 100, Msas outstripped supply by over 740000 square feet.

An 18000 square foot lease was executed with Baylor, Scott and white at our on campus development in Fort worth.

The backdrop for industry fundamentals remained strong.

Completions as a percentage of inventory remained near all time lows.

Supporting further growth in our $1 1 million square foot lease pipeline.

And a 25000 square foot renewal was completed with multi care at our building on the overlay hospital campus in Seattle.

Health systems remain on solid footing and continue to rely on outpatient facilities is a key component to reduce operating costs and expand market share.

This quarter demand in the top 100, Msas outstripped supply by over 740000 square feet.

The backdrop for industry fundamentals remained strong.

And completions as a percentage of inventory remain near all time lows.

Supporting further growth in our $1 1 million square foot lease pipeline.

Throughout this year health system activity as a percentage of our total leasing has continued to climb.

Health systems remain on solid footing and continue to rely on outpatient facilities as a key component to reduce operating costs and expand market share.

This quarter demand in the top 100, Msas outstripped supply by over 740000 square feet.

This quarter, we saw health system leasing comprise nearly 50% of our total activity up almost 20% from the low point in 2023.

<unk> completed.

Turning to our same store portfolio Aki.

Occupancy improved by 44 basis points sequentially and.

And in the quarter at 91, 1%.

Training costs and expand market share.

For the year, we have gained 77 basis points of occupancy, placing us inside the range of our full year expectations of 75 to 125 basis points.

Throughout this year health system activity as a percentage of our total leasing has continued to decline.

This quarter, we saw health system leasing comprise nearly 50% of our total activity up almost 20% from the low point in 2023.

We expect our absorption momentum to continue in the fourth quarter.

Shifting to the operating platform, we have made considerable progress migrating to an asset management model.

Turning to our same store portfolio Aki.

Occupancy improved by 44 basis points sequentially.

Recently, we hired two additional asset managers and we expect to fill the last couple of positions within this new platform in the coming months.

And in the quarter at 91, 1%.

For the year, we have gained 77 basis points of occupancy, placing us inside the range of our full year expectations of 75 to 125 basis points.

Full conversion is targeted for the end of the year, providing greater accountability closer to the real estate.

A key area of focus for the new asset management team will be the portion of our portfolio themed lease up and our strategic plan.

We expect our absorption momentum to continue in the fourth quarter.

Shifting to the operating platform, we have made considerable progress migrating to an asset management model.

This quarter, we saw notable leasing activity from this segment of our portfolio.

Recently, we hired two additional asset managers and we expect to fill the last couple of positions within this new platform in the coming months.

Out of the 441000 square feet of new leases that I mentioned earlier to.

217000 square feet or nearly 50% came from these properties.

Full conversion is targeted for the end of the year, providing greater accountability closer to the real estate.

I want to congratulate our team on the leasing and absorption gains we made this quarter.

A key area of focus for the new asset management team will be the portion of our portfolio themed lease up and our strategic plan.

With a robust leasing pipeline strong tenant retention and tightening supply.

Our portfolio is poised to see further leasing momentum.

This quarter, we saw notable leasing activity from this segment of our portfolio.

NOI growth throughout the remainder of the year and into 2026.

Out of the 441000 square feet of new leases that I mentioned earlier to.

I will now turn it over to Austin to discuss financial results.

217000 square feet or nearly 50% came from these properties.

Thanks, Rob This morning, I'll provide an overview of our third quarter 2025 results, our capital allocation activity and our updated 2025 guidance.

I want to congratulate our team on the leasing and absorption gains we made this quarter.

With a robust leasing pipeline strong tenant retention and tightening supply.

Our strong year to date momentum carried into the third quarter with normalized <unk> per share up 5% year over year to <unk> 41.

Our portfolio is poised to see further leasing momentum.

NOI growth throughout the remainder of the year and into 2026.

And same store cash NOI growth of five 4%.

Additionally, second quarter Fad per share was 33, resulting in a quarterly payout ratio of 73%.

I will now turn it over to Austin to discuss financial results.

Thanks, Rob This morning, I'll provide an overview of our third quarter 2025 results, our capital allocation activity and our updated 2025 guidance.

Our outperformance this quarter was broad based including 90 basis points of year over year occupancy gains.

Three 9% cash leasing spreads and strong expense controls.

Our strong year to date momentum carried into the third quarter with normalized <unk> per share up 5% year over year to <unk> 41.

We are at or above the high end of all of our core operational expectations for the year driven by our focus on pushing accountability and decision, making closer to the real estate as well as the natural uplift from the sale of the disposition assets.

And same store cash NOI growth of five 4%.

Additionally, second quarter Fad per share was 33, resulting in a quarterly payout ratio of 73%.

We moved rapidly in the second quarter to reduce expenses across the organization.

Our outperformance this quarter was broad based including 90 basis points of year over year occupancy gains.

This progress showed in the third quarter with normalized G&A of $9 $7 million.

Three 9% cash leasing spreads and strong expense controls.

While we are still building out key teams, we have a clear line of sight on our target of $45 million of G&A in 2026 and are well on our way to completing the build out of our best in class platform.

We are at or above the high end of all of our core operational expectations for the year driven by our focus on pushing accountability and decision, making closer to the real estate as well as a natural uplift from the sale of the disposition assets.

Proceeds from disposition activity during the third quarter and through October funded the repayment of approximately $225 million of our 2027 term loans.

We moved rapidly in the second quarter to reduce expenses across the organization.

This progress showed in the third quarter with normalized G&A of $9 $7 million.

Decreasing our leverage to five eight times.

Inclusive of our bond repayment earlier this year, we have paid down approximately $500 million of notes and term loans in 2025.

While we are still building out key teams, we have a clear line of sight on our target of $45 million of G&A in 2026 and are well on our way to completing the build out of our best in class platform.

The revolver in 2027 term loans will continue to be the use of proceeds for near term dispositions as our leverage continues to move into the mid fives.

Proceeds from disposition activity during the third quarter and through October funded the repayment of approximately $225 million of our 2027 term loans.

Now turning to our updated 2025 guidance.

We are increasing the midpoint of our <unk> per share guidance by a penny to a new range of $1 59 to $1 61.

Decreasing our leverage to five eight times.

Inclusive of our bond repayment earlier this year, we have paid down approximately $500 million of notes and term loans in 2025.

Additionally, we now see same store cash NOI growth of 4% to 475% and G&A of $46 million to $49 million before.

The revolver in 2027 term loans will continue to be the use of proceeds for near term dispositions as our leverage continues to move into the mid fives.

Before we turn to Q&A I want to note that this quarter, we received board authorization for a $1 billion ATM equity program.

Now turning to our updated 2025 guidance.

Up to $500 million in share buybacks.

We are increasing the midpoint of our <unk> per share guidance by a penny to a new range of $1 59 to $1 61.

The prospectus for the equity program will be filed in the fourth quarter.

Our existing share repurchase authorization expired this quarter and this new authorization as part of our normal course business.

Additionally, we now see same store cash NOI growth of four to $4, 75% and G&A of $46 million to $49 million before.

It's good practice to have both programs approved and available should we need them.

Before we turn to Q&A I want to note that this quarter, we received board authorization for a $1 billion ATM equity program.

Operator, we're now ready to move to the Q&A portion of the call.

Thank you as a reminder to ask a question. Please press star followed by the number one on your telephone keypad, well pause for just a moment to compile the Q&A roster.

And up to $500 million in share buybacks.

The prospectus for the equity program will be filed in the fourth quarter.

Our first question comes from Nick <unk> from Scotiabank. Please go ahead. Your line is open.

Our existing share repurchase authorization expired this quarter and this new authorization as part of our normal course business.

Thanks.

Yes. Good morning first question is just in terms of as you think about like the NOI.

It's good practice to have both programs approved and available should we need them.

Impact on the whole portfolio over the next several quarters, it's a little bit easier to model.

Operator, we're now ready to move to the Q&A portion of the call.

Thank you as a reminder to ask a question. Please press star followed by the number one on your telecom keypad, well pause for just a moment to compile the Q&A roster.

Asset sales, but can you talk some more about the redevelopment.

You talked about more assets entering that pool, presumably there's some earnings drag from that.

Our first question comes from Nick <unk> from Scotiabank. Please go ahead. Your line is open.

But then you also have occupancy sort of picking up and in the rest of your pool. So just any sort of high level thoughts about how to think about that impact over the next couple of quarters. Thanks.

Thanks, I guess good morning first question is just in terms of <unk>.

Think about like the NOI.

Yeah, Hey, Nick it's Pete here, So I think from the stabilized portfolio perspective, as we've talked about and as we laid out.

The impact on the whole portfolio.

For the next several quarters, it's a little bit easier to model.

It's sales, but can you talk some more about the redevelopment you talked about more assets entering that pool, presumably there's some earnings drag from that.

Strategic DAC.

We think a good stabilized year over year growth rate is probably more like 3% to 4% and fundamentals continue to improve.

We will continue to assess if you can even do better than that but I think we've laid out 3% to 4% I think on the incremental $50 million.

Upside to NOI over the next three plus years, we did forecast probably $20 million to $40 million was the range.

Yeah, Hey, Nick it's Pete here, so I think from the stabilized portfolio.

<unk> as we've talked about and as we laid out.

Over the next three years since the capital spend does take time to go out the door and ultimately the NOI you achieve from those redevelopments.

In our strategic DAC.

We think a good stabilized year over year growth rate is probably more like 3% to 4% and fundamentals continue to improve.

It takes a couple of years to earn in.

We will continue to assess if you can even do better than that but I think we've laid out 3% to 4% and again the incremental $50 million.

So we have laid out a revamped table in our supplemental and we're open to any feedback from people on.

Any additional information to include in there to help from a modeling perspective, and I think as you think about the $50 million of NOI, probably half of that is coming from Redevelopments and we added.

Upside to NOI over the next three plus years, we did forecast probably $20 million to $40 million was the range.

Over the next three years since the capital spend does take time to go out the door and ultimately the NOI you achieve from those redevelopments.

Five assets in this quarter.

Would expect to add probably another five to 10 over the next couple of quarters, one of the things I've challenged the team here to do is to identify those assets sooner rather than later, so we can start to work towards the higher end of that incremental NOI upside and that's why you saw a lot more come into the pool this quarter and Youll see more.

It takes a couple of years to earn in.

So we have laid out a revamped table in our supplemental and we're open to any feedback from people on.

Come in in the next couple of quarters as well and we'll continue to provide information for everybody to track the other kind of $25 million of the $50 million of upside is going to come from.

Five assets in this quarter I would expect to add probably another five to 10 over the next couple of quarters, one of the things I've challenged the team here to do is to identify those assets sooner rather than later, so we can start to work towards the higher end of that incremental NOI upside and that's why you saw.

The lease up portfolio that is not redevelopment a lot of those are in same store and I think that's one of the reasons why you were able to see some better than 3% to 4% NOI growth numbers that are coming out today as we're beginning the lease up and the absorption in those assets I could see.

A lot more come into the pool this quarter and Youll see more come in in the next couple of quarters as well and we'll continue to provide information for everybody to track the other kind of $25 million of the $50 million of upside is going to come from.

That continuing for another year or two as well as we selectively invest capital into suites and not do redevelopments, there, but targeted specific suite by suite capital investment.

The lease up portfolio that is not redevelopment a lot of those are in same store and I think that's one of the reasons why you are able to see some better than 3% to 4% NOI growth numbers that are coming out today as we're beginning the lease up and the absorption in those assets.

So that's the way we're thinking about I know there was a lot to unpack within that but I wanted to give the two big buckets within the $50 million of incremental NOI over the next couple of years.

Yes.

Okay, great. Thanks, and then the second question is just in terms of.

The health system share of leasing picking up this quarter.

I could see that continuing for another year or two as well as we selectively invest capital into suites and not do redevelopment there, but targeted specific suite by suite capital investment.

Is that was that also just skewed by renewals for those health systems in the quarter versus prior quarters are you having more success in terms of actually capturing a higher.

So that's the way we're thinking about I know there was a lot to unpack within that but I wanted to give the two big buckets within the $50 million of incremental NOI over the next couple of years.

Health system, Sharon and your new lease Sandwich I know it's been a.

Focus for you guys. Thanks.

Maybe I'll, let Rob handle that one, yes, hey, Nick Yeah.

Okay, Great. Thanks, and then second question is just in terms of.

I think that the.

The volume that I talked about.

The health system share of leasing picking up this quarter.

With total leasing and certainly we've seen a we've seen a pickup this year, it's been a gradual trend upwards this year and really going all the way back to 2003 as I mentioned that low point.

Is that was that also just skewed by renewals for those health systems in the quarter versus prior quarters are you, having any think more success in terms of actually capturing a higher.

And 'twenty three.

And so it's what we've continued to experience in terms of.

Health system sharing and your new leasing, which I know has been a.

The continuing trend for moving services out of the hospital into the outpatient setting which is certainly up.

Focus for you guys maybe.

And maybe I'll, let Rob handle that one, yes, hey, Nick.

A tailwind for us, but then I think it also is continuing to improve tenant relations with our with our health systems.

I think that the.

The volume that I talked about.

With total leasing and certainly we've seen a we've seen a pickup.

And the effort that we've been doing over the past couple of years, you've really seen that that pay off for us. So.

This year, it's been a gradual trend upwards this year and really going all the way back to 'twenty three as I mentioned that low point.

It's a combination of.

Health systems are continuing to grow into.

And 'twenty three.

And so it's what we've continued to experience in terms of.

Grow their market share, but then I think also just better tenant relations.

<unk>.

The continuing trend for moving services out of the hospital into the outpatient setting which is certainly.

Continuing to work the relationships we have and.

And Nick on the revamped asset management platform I think this is one of the really big benefits of it as the asset managers are really going to be point on the health system relationships and with the local teams out in their various markets in dialogue.

A tailwind for us, but then I think it also is continuing to improve tenant relations with our with our health systems.

And the effort that we've been doing over the past couple of years, you've really seen that that pay off for us. So.

Our company to them has picked up pretty significantly over the last couple of quarters and I expect that to continue to pick up going forward.

It's a combination of.

Health systems are continuing to grow into.

Grow their market share, but then I think also just better tenant relations and.

Alright, thanks, guys.

Thanks, Nick.

<unk>.

Our next question comes from Rich Anderson from Cantor Fitzgerald. Please go ahead. Your line is open.

Continuing to work the relationships we have.

Hey, Thanks, good morning so.

You lowered your cap rate assumption for dispositions by 25 basis points to 675, you been able to achieve six five year to date.

I'm wondering if that's conservatism or if you think more.

Well I guess, you did say more of the remaining.

A couple of quarters and I expect that to continue to pick up going forward.

Alright, thanks, guys.

It's coming out of the noncore bucket is that right is it would we would expect that the cap rate number for the remaining dispositions to be higher for that reason is do I have that logically correct yeah.

Thanks, Nick.

Our next question comes from Rich Anderson from Cantor Fitzgerald. Please go ahead. Your line is open.

Thanks, Good morning so.

Obviously, we've been pleased with the execution so far.

You lowered your cap rate assumption for dispositions by 25 basis points to 675, you been able to achieve six five year to date.

And year to date, we're at six 5% our expectation is some of the assets that are taking longer to get done and it shouldnt be a surprise or those with value add components associated with them. Good assets just maybe in different markets are markets, we're not going to be concentrated in.

I'm wondering if that's conservatism or if you think more.

Well I guess, you did say more of the remaining.

It's coming out of the noncore bucket is that right as we would expect that the cap rate number for the remaining dispositions to be higher for that reason is do I have that logically correct yes.

Knowing forward so I'd say the balance of what is remaining to close it's probably skewed more to the value add component and like I said Theres also some legacy office assets as well.

Obviously, we've been pleased with the execution so far.

And in year to date, we're at six 5%.

We're looking to to shed.

So I would not look into anything other than it's just the mix of the assets remaining is probably a little bit higher from an unlevered IRR perspective, as the way the buyers are looking at it Okay and then just.

Our expectation is some of the assets that are taking longer to get done and it shouldnt be a surprise or those with value add components associated with them. Good assets just maybe in different markets are markets, we're not going to be concentrated in going forward.

There's a lot going on.

In medical office these days.

Largely in terms of dispositions.

Say the balance of what is remaining to close it's probably skewed more to the value add component and like I said Theres also some legacy office assets as well that we're looking to to shed.

You will tower dock are all in the market to sell total about nine to 10 billion at least just from those three.

Companies does what does that tell you.

In terms of the appetite I mean does it does it give you any pause to see that level of selling when this is your your business and if not I assume you're going to say no and if not tell me tell me why.

I think what it's showing is that theres, a very very strong bid for outpatient medical in the private markets right now.

Largely in terms of dispositions.

You will tower dock are all in the market to sell total about nine to 10 billion at least just from those three.

That's probably the best way to.

Characterize it.

Our focus on dispositions.

The company's does what does that tell you in.

Is really to create the best portfolio going forward from an NOI growth perspective, and our balance sheet was over levered and that dates back multiple years, and we need to get our balance sheet leverage metrics to a more appropriate level and they're almost there at this point in time.

In terms of the appetite I mean does it does it give you any pause to see that level of selling when this is your your business and if not I assume you're going to say no and.

And if not tell me tell me why.

I think what it's showing is that theres, a very very strong bid for outpatient medical in the private markets right now.

So our intent is to complete the dispositions that we are working on right now we're pretty darn close to that it's a pretty lofty goal to get all that done this year really before our next earnings call, but we're really happy with the strong bid for the asset class I think it shows that investors see.

That's probably the best way to.

Characterize it.

Our focus on dispositions is really to create the best portfolio going forward from an NOI growth perspective, and our balance sheet was over levered and that dates back multiple years, and we need to get our balance sheet leverage metrics to a more appropriate level and they're almost there.

A lot of value in it.

And we look forward to continuing to generate pretty strong returns on the portfolio that we're keeping and going forward and we'd like to be switching to going more on offense as opposed to going on or really playing more of a defensive game at the moment and I think thats going to come pretty soon.

At this point in time.

We're going to have balance sheet capacity to be able to shift to go on offense as well. So I look at it and say great. There's a lot of product on the market, maybe there's opportunities for us.

Joint ventures, or even on balance sheet to start to take advantage of that.

A lot of value in it.

I guess the thing that I concern myself with us like the one thing that we've been waiting to happen is to extract some of the medical office ownership by the systems.

And we look forward to continuing to generate pretty strong returns on the portfolio that we're keeping and going forward and we'd like to be switching to going more on offense as opposed to go.

And.

That stuff, that's sort of tied up there is a lot of this sale activity going back to the health systems, and hence sort of you're kind of going backwards in time in terms of the ownership structure of medical office.

I'm, just wondering I guess, the buyer pool and.

We have long term ramifications are of it.

Systems have certainly.

Picked up their purchasing and we've noted that we've actually generated some pretty strong cap rates I'd say the health system deals tend to be on the lower end of the cap rate range.

What we've been quoting so I think thats, great. We can take advantage of that to the extent that we need to but the majority of what you just quoted the $8 billion to $10 billion is is not going to health systems health systems have <unk>.

Austen Wurschmidt: Wondering against the buyer pool, you know, what the long-term ramifications are of it.

And some of it will end up in their hands, because they want to control the strategic real estate on their campuses, but most of that $8 billion to $10 billion that you just mentioned is going to non health system buyers.

We have long term ramifications of it.

Peter Scott: You know, health systems have certainly picked up their purchasing, and we've noted that. We've actually generated some pretty strong cap rates. I'd say the health system deals tend to be on the lower end of the cap rate range of what we've been quoting. I think that's great. We can take advantage of that to the extent that we need to. The majority of what you just quoted, the $8 to $10 billion, is not going to health systems. I mean, health systems have ROFRs, and some of it will end up in their hands because they want to control the strategic real estate on their campuses. Most of that $8 to $10 billion that you just mentioned is going to non-health system buyers.

Our systems have certainly.

Picked up their purchasing and we've noted that we've actually generated some pretty strong cap rates I'd say the health system deals tend to be on the lower end of the cap rate range.

Okay, great. Thanks, Pete Thanks, everyone.

Our next question comes from Austin, <unk> Schmidt from Keybanc capital markets. Please go ahead. Your line is open.

What we've been quoting so I think thats, great. We can take advantage of that to the extent that we need to but the majority of what you just quoted the $8 billion to $10 billion is not going to health systems health systems have brokers and some of it will end up in their hands because they want to control the strategic real estate on their cash.

Hey, good morning, everybody.

Just going back to the plans to add additional assets to the redevelopment pool in the coming quarters.

I'm just wondering are these currently occupied assets.

There could be an initial move out before you add that into the pool. It looked like there was a move out in that bucket. This quarter are these just normal course assets that are in that lease up bucket that needs a little bit of capital.

But most of that 8% to $10 billion that you just mentioned is going to non health system buyers.

Austen Wurschmidt: Okay. Great. Thanks, Pete. Thanks, everyone.

Okay, great. Thanks, Pete Thanks, everyone.

Peter Scott: Yep.

Operator: Our next question comes from Austen Wurschmidt from KeyBanc Capital Markets. Please go ahead. Your line is open.

Our next question comes from Austin, <unk> Schmidt from Keybanc capital markets. Please go ahead. Your line is open.

Order to achieve the returns that youre focused on.

Yeah, I would say that most of it is current vacancy and we see an opportunity to invest capital or it's perhaps there's near term roll coming up.

[Analyst]: Hey, good morning, everybody. Pete, just going back to the plans to add additional assets to the redevelopment pool in the coming quarters, I'm just wondering, are these currently occupied assets that, you know, there could be an initial move-out before you add that into the pool? It looked like there was a move-out in that bucket this quarter. Are these just normal-course assets that are in that lease-up bucket that need a little bit of capital, you know, in order to achieve the returns that you're focused on?

Hey, good morning, everybody.

Just going back to the plans to add additional assets to the redevelopment pool in the coming quarters.

I'm just wondering are these currently occupied assets that.

And we see an opportunity with some investment to get the anchor health system to extend on a long term lease and at a pretty healthy mark to market. That's the majority of it every now and again you will have a vacate although if you look our retention numbers are pretty darn high. So I would say this is in the minority were you.

There could be an initial move out before you add that into the pool.

Like there was a move out in that bucket. This quarter are these just normal course assets that are in that lease up bucket that needs a little bit of capital.

In order to achieve the returns that youre focused on.

Peter Scott: Yeah. I would say that most of it is current vacancy, and we see an opportunity to invest capital, or it's perhaps there's near-term roll coming up. We see an opportunity with some investment to get the Anchor Health System to extend on a long-term lease and at a pretty healthy mark-to-market. That's the majority of it. Every now and again, you will have a vacate, although if you look, our retention numbers are pretty darn high. I'd say this is in the minority where you have a tenant vacate, and you say, "What do we wanna do with the asset?" It may require some pretty significant capital investment to reposition it to get the appropriate, you know, increase in rates within that market.

Yeah.

A tenant vacate and you say what do we want to do with the asset.

I'd say that most of it is current vacancy and we see an opportunity to invest capital or it's perhaps there's near term roll coming up.

It may require some pretty significant capital investment to reposition it to get the appropriate.

The increase in rates within that market, but I'd say that happens probably less frequently than it is for us today current vacancy or an opportunity to invest some capital and also get a pretty nice markup on the existing rent role roster.

And we see an opportunity with some investment to get the anchor health system to extend on a long term lease and at a pretty healthy mark to market.

That's the majority of it every now and again you will have a vacate although if you look our retention numbers are pretty darn high. So I would say this is in the minority where you have a tenant vacate and you say what do we want to do with the asset it may require some pretty significant capital investment to reposition it to get the appropriate.

Okay. That's helpful and then.

Peter or Austin.

You had referenced kind of looking forward to pivoting and potentially moving on offense.

And then Austin kind of flagged that you've put in place the ATM as a capital allocation tool and a sore.

Increase.

Increase in rates within that market, but I would say that happens probably less frequently than it is for us today current vacancy or an opportunity to invest some capital and also get a pretty nice markup on the existing rent role roster.

Peter Scott: I'd say that happens probably less frequently than it is for us today, current vacancy or an opportunity to invest some capital and also get a pretty nice mark-up on the existing rent-roll roster.

I mean is that something that we should expect.

In the near term for you guys to start to lean into that a little bit and.

Given the fact that the transaction market is heating up and there are opportunities out there that maybe you could mine through it and find something that kind of fits with the profile that you are looking for.

Okay. That's helpful and then.

[Analyst]: That's helpful. Peter or Austen, Pete, you had referenced kind of looking forward to pivoting and potentially moving on offense. Austen kind of flagged that you put in place the ATM as a capital allocation tool and a source. Is that something that we should expect in the near term from you guys to start to lean into that a little bit? Given the fact that the transaction market's heating up and there are opportunities out there, maybe you could mine through it and find something that kind of fits with the profile that you're looking for today in sort of the Healthcare Realty Trust 2.0?

Peter or Austin.

You had referenced kind of looking forward to pivoting and potentially moving on offense.

Today in sort of the healthcare realty to point out.

Yeah.

I'd say I think as a matter of course it makes sense. We just always have an active ATM in place, we're not intending to use it based upon where our stock is trading today, we do have some balance sheet capacity that we are building know through delevering below our target leverage level and as we think about going on offense.

And then Austin kind of flagged that you've put in place the ATM as a capital allocation tool and a source.

That's something that we should expect.

In the near term for you guys to start to lean into that a little bit and.

It's not huge numbers as a result of the fact that we are constrained we're not going to issue equity at today's levels.

Today in sort of the health care real estate to point out.

But we certainly could look to grow some of our joint ventures, and we are talking to our joint venture partners actively on that.

Peter Scott: Yeah. I would say I think as a matter of course, it makes sense to just always have an active ATM in place. We're not intending to use it based upon where our stock is trading today. We do have some balance sheet capacity that we are building, though, through deleveraging below our target leverage levels. As we think about going on offense, it's not huge numbers as a result of the fact that we are constrained. We're not going to issue equity at today's levels. We certainly could look to grow some of our joint ventures, and we are talking to our joint venture partners actively on that. We could look to do some selective smaller deals, tuck-in acquisitions in core markets or on core campuses. That's the way we're thinking about it right now.

Yeah.

I'd say I think.

Matter of course, it makes sense, we just always have an active ATM in place, we're not intending to use it based upon where our stock is trading today, we do have some balance sheet capacity that we're building now through delevering below our target leverage level and as we think about going on offense.

We could look to do some selective smaller.

Deals tuck in acquisitions in core markets or non core campuses, but that's the way we're thinking about it right now and I don't want anyone to come off this call and thank God, they're putting an ATM in place theyre going to start issuing equity again I just think it's important to have it up and running and it hasnt been up and running for years.

It's not huge numbers as a result of the fact that we are constrained we're not going to issue equity at today's levels.

So that's really why I had Austin say, what he said in the prepared remarks was to just tell people, it's coming but I wouldn't read anything into it.

But we certainly could look to grow some of our joint ventures, and we are talking to our joint venture partners actively on that.

Yes, that's helpful clarification, thanks for the time.

We could look to do some selective smaller.

Our next question comes from Juan Sanabria from BMO Capital markets. Please go ahead. Your line is open.

Deals tuck in acquisitions in core markets or on core campuses, but that's the way we're thinking about it right now and I don't want anyone to come off this call and thank God, they're putting an ATM in place theyre going to start issuing equity again I just think it's important to have it up and running it hasnt been up and running for years.

Hi, This is robin sitting in for one.

Peter Scott: I don't want anyone to come off this call and think, "Oh, they're putting an ATM in place. They're going to start issuing equity again." I just think it's important to have it up and running. It hasn't been up and running for years. That's really why I had Austen say what he said in the prepared remarks, to just tell people it's coming, but I wouldn't read anything into it.

On the 700 million with.

Decisions on the contract.

Just curious if any of them are in the same store pool.

So that's really why I had Austin said, what he said in the prepared remarks was to just tell people, it's coming but I wouldn't read anything into it.

Anything else.

Of them are targeted for a JV and what pricing you were expecting.

Yeah.

Yeah, no none of them are targeted for joint ventures.

[Analyst]: Yeah, that's a helpful clarification. Thanks for the time.

Yes, that's helpful clarification, thanks for the time.

Peter Scott: Yeah.

So, they're all going to get sold 100%.

Operator: Our next question comes from Juan Sanabria from BMO Capital Markets. Please go ahead. Your line is open.

Our next question comes from Juan Sanabria from BMO Capital markets. Please go ahead. Your line is open.

And then are any in the same store pool I would say at this point in time now given how far along we are and the probability of those closing the high degree of probability of them closing their all in held for sale at this point in time and that was the big move where you saw a.

[Analyst]: Hey, this is Robin sitting in for Juan. On the $700 million that is positioned on the contract, just curious if any of them are in the same-store pool, if any of them are targeted for a joint venture, and what pricing you're expecting.

Hi, This is robin sitting in for one.

On the 700 millimeter.

<unk> is under contract.

Curious if any of them are in the same store pool, if anything any of them are targeted for a JV and what pricing you were expecting.

40, plus assets go from the operating portfolio into held for sale this quarter.

Yeah.

Peter Scott: Yeah. No, none of them are targeted for joint ventures, so they're all going to get, you know, sold 100%. Are any in the same-store pool? I would say at this point in time, no. Given how far along we are and the probability of those closing, the high degree of probability of them closing, they're all in held for sale at this point in time. That was the big move where you saw, I don't know, 40-plus assets go from the operating portfolio into held for sale this quarter.

So on the recent dispositions.

Yeah, no none of them are targeted for joint ventures.

There are.

Many impacted same store NOI increase.

So, they're all going to get sold a 100%.

They were not part of the same store pool on the recent dispositions either.

Yeah.

Yeah, Hey, good morning, It's Austin, if you look at the increase in same store NOI guidance for the year I would say the vast majority of that is being driven by.

40, plus assets go from the operating portfolio into held for sale this quarter.

Especially looking at the third quarter, a 4% same store revenue growth 90 basis points of year over year occupancy gains and sub 2% property operating expenses.

[Analyst]: On the recent dispositions, there wasn't any impact to the same-store NOI increase, as they were not part of the same-store pool and on the recent dispositions either.

And so on the recent dispositions.

There.

And any impact to the same store NOI increase.

The core portfolio the stabilized portfolio continues to perform extremely well and even including the assets moving moving into held for sale. We still would have been at the top end of our revised guidance range for same store growth.

They were not part of the same store pool on the recent dispositions either.

Okay.

Austen Wurschmidt: Yeah. Hey, good morning. It's Austen. If you look at the increase in same-store NOI guidance for the year, I'd say the vast majority of that is being driven by, you know, especially looking at the third quarter, 4% same-store revenue growth, 90 basis points of year-over-year occupancy gains, and sub-2% property operating expenses. I would say the core portfolio, the stabilized portfolio, continues to perform extremely well. Even including the assets moving into held for sale, we still would have been at the top end of our revised guidance range for same-store growth. That being said, there is, as I mentioned in my prepared remarks, a little bit of an uplift just given the disposition portfolio, as we showed in the strategic deck, does grow slower than the core stabilized portfolio.

Yeah, Hey, good morning, It's Austin, if you look at the increase in same store NOI guidance for the year I would say the vast majority of that is being driven by.

That being said there is as I mentioned in my prepared remarks, a little bit of an uplift just given the disposition portfolio as we showed in the strategic deck does grow slower than the core stabilized portfolio.

Especially looking at the third quarter, 4% same store revenue growth 90 basis points of year over year occupancy gains and sub 2% property operating expenses outside of the core portfolio. The stabilized portfolio continues to perform extremely well and even including the assets moving moving.

Thank you.

Shifting to the external growth opportunity.

Could you maybe level set expectations with us when your earliest a possibility it could go on offense.

Into held for sale, we still would have been at the top end of our revised guidance range for same store growth that being said there is as I mentioned in my prepared remarks, a little bit of an uplift just given the disposition portfolio as we showed in the strategic deck does grow slower than the core stabilized.

Well I think just from a balance sheet capacity perspective, we said we wanted to be kind of in the mid to high five net debt to EBITDA. We're at $5 eight we'd like it to come down a little bit from here, but when you factor in <unk>.

$700 million more of sale still yet to go in some debt repayment there we will go.

So.

Yes.

Likely less than five five times net debt to EBITDA. So, it's probably anywhere from $150 million to $300 million of capital we can put out.

[Analyst]: Thank you. Shifting to the external growth opportunity, could you maybe level set expectations with us when you earliest see a possibility to go on offense?

Thank you and shifting to the external growth opportunity.

Can you maybe level set expectations with us when your earliest.

Possibility it could go on offense.

Without taking our leverage levels beyond what our targets are so we are building up a little bit of dry powder and that doesn't give us any benefit for EBITDA growth in future years, and so on and so forth. It's just the immediate amount of capital. So there is some tuck in acquisitions, we could do and they would be accretive since we'd be financing that.

Peter Scott: I think just from a balance sheet capacity perspective, we said we wanted to be kind of in the mid to high 5 net debt/EBITDA. We're at 5.8. We'd like it to come down a little bit from here. When you factor in $700 million more of sales still yet to go and some debt repayment there, we will go likely less than five and a half times net debt/EBITDA. It's probably anywhere from $150 million to $300 million of capital we can put out, without taking our leverage levels beyond what our targets are. We're building up a little bit of dry powder, and that doesn't give us any benefit for EBITDA growth in future years and so on and so forth. It's just the immediate amount of capital.

Well I think just from a balance sheet capacity perspective, we said we wanted to be kind of in the mid to high five net debt to EBITDA. We're at five eight we'd like it to come down a little bit from here, but when you factor in seven.

$700 million more of sale still yet to go in some debt repayment there we will go.

With a 100% leverage.

Likely less than five five times net debt to EBITDA. So, it's probably anywhere from $150 million to $300 million of capital we can put out.

And then lastly for me if I may.

On the on the margin improvement timeline, you outlined in the deck.

Okay.

Without taking our leverage levels beyond what our targets are so we are building up a little bit of dry powder and that doesn't give us any benefit for EBITDA growth in future years, and so on and so forth. It's just the immediate amount of capital. So theres. Some tuck in acquisitions, we could do and they would be accretive since we'd be financing that.

Can you, maybe just elaborate a little bit about on Tommy.

Yes.

I'll talk both about occupancy and I'll talk about margins, we did lay out a three year growth framework.

Peter Scott: There are some tuck-in acquisitions we could do, and they would be accretive since we'd be financing that with 100% leverage.

And we did lay out the pieces to that I think selling some of these.

With a 100% leverage.

Our call higher IRR value add assets, you get an immediate benefit from that and Youre seeing that right now with our same store occupancy at a little bit better than 91% of our total occupancy in the very high.

[Analyst]: On the margin improvement timeline, you outlined in the recent deck the 65, 66%. Can you maybe just elaborate a little bit on that, on timing?

And then lastly for me if I may.

On the on the margin improvement timeline, you're outlining the reasons.

The 65, 66% can you maybe just elaborate a little bit on Tommy.

<unk> I think it's 80, 889% is probably 89 plus at this point in time and our margins are in that 64% to 65% area last quarter and in this quarter. So.

Peter Scott: Yeah. You know, I think I'll talk both about occupancy and I'll talk about, you know, margins. We did lay out a three-year growth framework, and we did lay out the pieces to that. I think selling some of these, what we call higher IRR value-add assets, you get an immediate benefit from that. You're seeing that right now with our same-store occupancy at a little bit better than 91% and our total occupancy in the very high, you know, 80s. I think it's, you know, 88%, 89%. It's probably 89% plus at this point in time. You know, our margins are in that 64% to 65% area last quarter and this quarter. It's probably over multiple years that we would see that stabilized occupancy and margin levels, but we're working our way towards that pretty darn fast.

Yes.

I'll talk both about occupancy and I'll talk about margins, we did lay out a three year growth framework.

And we did lay out the pieces to that I think selling some of these.

It's probably over multiple years that we would see that stabilized occupancy and margin levels, but we're working our way towards that pretty darn fast.

Our call higher IRR value add assets, you get an immediate benefit from that and Youre seeing that right now with our same store occupancy at a little bit better than 91% and our total occupancy in the very high.

And the more and more absorption, we get the better the leasing environment. The quicker we can get there, but I think this quarter was a very good example, as to how fast we could get there through sales and then going forward, it's really going to come through.

<unk> I think it's 80, 889% is probably 89 plus at this point in time and our margins are in that 64% to 65% area last quarter and in this quarter. So.

Organic leasing as well as expense controls.

Thank you.

It's probably over multiple years that we would see that stabilized occupancy and margin levels, but we're working our way towards that pretty darn fast.

Our next question comes from Seth <unk> from Citi. Please go ahead. Your line is open.

Hi, Thanks for taking my question I, just wondered if you could start off by maybe commenting this has been talked about a little bit, but just overall changes to the buyer pool depth of the buyer pool. Since you had kind of started to distributions.

Peter Scott: The more and more absorption we get, the better the leasing environment, the quicker we can get there. I think this quarter was a very good example as to how fast we could get there through sales. Going forward, it's really going to come through, you know, organic leasing, as well as expense controls.

The more and more absorption, we got the better the leasing environment. The quicker we can get there, but I think this quarter was a very good example, as to how fast we could get there through sales and then going forward, it's really going to come through.

Yes, maybe I'll have Brian Crowley.

Organic leasing as well as expense controls.

Jump in on that.

I would say buyers have always been there we've been selling we sold material assets in 'twenty four.

[Analyst]: Thank you.

Thank you.

Operator: Our next question comes from Seth Bergey from Citigroup. Please go ahead. Your line is open.

Our next question comes from Seth <unk> from Citi. Please go ahead. Your line is open.

And more so this year the buyer demand and a buyer appetites remained strong all along the biggest change has been the steady end market improvement in the lending environment.

[Analyst]: Hi. Thanks for taking my question. I just wondered if you could start off by maybe commenting, you know, this has been talked about a little bit, but just, you know, overall changes to the buyer pool, depth of the buyer pool since you kind of started the dispositions.

Alright, Thanks for taking my question I, just wondered if you could start off by maybe commenting this has been talked about a little bit, but just overall changes to the buyer pool depth of the buyer pool. Since you had kind of started to distributions.

Bank liquidity is way up in our space today Bank originated loan rates are dipping into the high fours.

So that's really fueling that buyer appetite.

Peter Scott: Yeah. Maybe I'll have Ryan Crowley jump in on that.

Yes, maybe I'll have Brian Crowley.

Jump in on that.

Ryan Crowley: Yeah. Hi, Seth. I would say buyers have always been there. We've been selling, you know, we sold material assets in 2024, and more so this year. The buyer demand and the buyer appetite remained strong all along. The biggest change has been the steady in-market improvement in the lending environment. Bank liquidity is way up in our space today. Bank-originated loan rates are dipping into the high 4%. That's really fueling that buyer appetite. The buyer appetite is being led by primarily private institutional capital. As Pete referenced earlier, the health systems, health system percentage of MOB acquisitions this year is about as high as it's been in recent memory. For the full year for us, on the billion dollars or so of dispositions, our mix, our buyer mix will be roughly half and half private buyers and health systems.

The buyer appetite is being led by primarily private institutional capital and as Pete referenced earlier, the health systems health system percentage of MLP acquisitions. This year is about as high as it's been in recent memory.

I would say buyers have always been there we've been selling we sold material assets in 'twenty four.

And more so this year the <unk>.

Demand in our buyer appetites remained strong all along the biggest change has been the steady end market improvement in the lending environment.

But for the full year for us on the $100 billion or so of dispositions our mix, our buyer mix will be roughly half and half with private buyers and health systems.

Bank liquidity is way up in our space today Bank originated loan rates are dipping into the high fours.

Thanks, and then I guess, just a second one.

So that's really fueling that buyer appetite.

With the 700 million kind of under contract.

The buyer appetite is being led by primarily private institutional capital and as Pete referenced earlier, the health systems health system percentage of <unk> acquisitions. This year is about as high as it's been in recent memory.

Do you think is that just kind of like a timing issue.

Some of those closing kind of into that.

Into next year in terms of.

The disposition guidance remaining unchanged.

But for the full year for us on the $1 billion or so of dispositions our mix, our buyer mix will be roughly half and half private buyers and health systems.

Yeah.

Some of them may close in early January.

But there is not much more to read into it than that.

Okay. Thanks.

[Analyst]: Thanks. I guess just a second one, with the $700 million kind of under contract. Do you think is that just kind of like a timing issue of some of those closing into next year in terms of why the disposition guide remains unchanged?

Thanks, and then I guess, just a second one.

I'll just add it's a high number of transactions.

With the 700 million kind of under contract.

Year to date to 35 properties, we've sold have been 24 different discrete transactions.

Do you think is that just kind of like a timing issue.

We have over a dozen remaining.

Some of those closing kind of into that.

It's not one or two large transactions that dictate the timing it is the number.

And into next year in terms of.

Why the disposition guidance remaining unchanged.

Peter Scott: Yeah, some of them may close in early January, but there's not much more to read into it than that.

Yeah.

Great. Thanks.

Some of them may close in early January.

Our next question comes from Michael Carroll from RBC Capital markets. Please go ahead. Your line is open.

But there's not much more to read into it than that.

[Analyst]: Okay. Thanks.

Okay. Thanks.

Yeah. Thanks, Peter I wanted to circle back on your comments on HR can be more offensive or a little bit more offensive in this market.

Ryan Crowley: I'll just add, it's a high number of transactions. You know, year to date, the 35 properties we've sold have been 24 different discrete transactions. You know, we have over a dozen remaining. It's not one or two large transactions that dictate the timing. It's the number.

I'll just add it's a high number of transactions.

Year to date to 35 properties, we've sold have been 24 different discrete transactions.

How difficult is it define these strategic investments just given the strong private bid I mean is there.

We have over a dozen remaining.

It's not one or two large transactions that dictate the timing it is the number.

Options or opportunities, where HR has specific relationships that it can leap can levered to get these deals I guess can you talk a little bit about that.

[Analyst]: Great. Thanks.

Sure why don't you jump in on this Ryan and then I'll touch on it on the yen sure Michael I mean, our reputation in the acquisitions market has historically been that of a sharpshooter.

Great. Thanks.

Operator: Our next question comes from Michael Carroll from RBC Capital Markets. Please go ahead. Your line is open.

Our next question comes from Michael Carroll from RBC Capital markets. Please go ahead. Your line is open.

[Analyst]: Yeah. Thanks. Pete, I wanted to circle back on your comments on HR can be more offensive or a little bit more offensive in this market. I mean, how difficult is it to find these strategic investments just given the strong private bid? I mean, is there options or opportunities where HR has specific relationships that it can lever to get these deals? I guess, can you talk a little bit about that?

Yeah. Thanks, Peter I wanted to circle back on your comments on HR can be more offensive or a little bit more offensive in this market.

Our growth in years past.

Bob assets typically one at a time and primarily frankly and relationship driven off market transactions that would be a majority of the deals we had historically done.

How difficult is it define these strategic investments just given the strong private bid I mean is there options or opportunities, where HR has specific relationships that it can leap can lever to get these deals I guess can you talk a little bit about that.

Today, we have an app.

Active inventory of what we call tier one acquisition targets that we've already identified and our top 20 priority markets with the systems, we want to align with and specifically on the top performing hospital campuses, where we've already done the analysis, we've cataloged over 400 tier one acquisition debt.

[Analyst]: Sure. Why don't you jump in on this, Ryan, and then I'll touch on it at the end?

Sure why don't you jump in on this Ryan and then I'll touch on it on the yen sure Michael I mean, our reputation in the acquisitions market has historically been that of a sharpshooter.

Ryan Crowley: Sure, Michael. Yeah. I mean, our reputation in the acquisitions market has historically been that of a sharpshooter. During our growth in years past, you know, we bought assets typically one at a time and primarily, frankly, in relationship-driven off-market transactions. That would be a majority of the deals we had historically done. Today, we have, you know, an active inventory of what we call tier one acquisition targets that we've already identified in our top 20 priority markets with the systems we want to align with. Specifically on the top-performing hospital campuses where we've already done the analysis, we've cataloged over 400 tier one acquisitions that our team tries to sharpshoot via these direct relationships that we have with owners, brokers, and key relationships in health systems in these markets. What does that represent? Probably 20 million square feet, over $8 billion of volume of value.

During our growth in years past.

Bought assets typically one at a time and primarily frankly and relationship driven off market transactions that would be a majority of the deals we had historically done.

Our team tries to sharp shoot via these direct relationships that we have with owners brokers and key relationships in health systems. In these markets what does that represent probably 20 million square feet over $8 billion of <unk>.

Today, we have <unk>.

Active inventory of what we call tier one acquisition targets and we've already identified and our top 20 priority markets with the systems, we want to align with and specifically on the top performing hospital campuses, where we've already done the analysis, we have cataloged over 400 tier one acquisition.

<unk> have value and our team actively pursues that the only other thing I'll add is as cap rates have steadily declined from the beginning of the year, we have definitely noticed over the recent months and uptick in the number of assets and the quality of assets coming to market. So there is more opportunity out there today.

Hey, Mike I, just wanted to jump in for a second on that.

Glad we're obviously talking about going on.

Offense, just a little bit, but our focus is first and foremost on our three year growth framework and generating organic growth and reinvest in capital into our real estate. When we talk about going on offense. This has some modest balance sheet capacity that we have and if we can find ways to.

Our value and our team actively pursues that the only other thing I'll add is as cap rates have steadily declined from the beginning of the year, we have definitely noticed over the recent months and uptick in the number of assets and the quality of assets coming to market. So there is more opportunity out there today.

Ryan Crowley: Our team actively pursues that. The only other thing I'll add is as cap rates have steadily declined from the beginning of the year, we have definitely noticed over the recent months an uptick in the number of assets and the quality of assets coming to market. There is more opportunity out there today.

To put that capital to work to generate some nice accretion primarily in joint ventures, where we get an enhanced yield that stuff that we will look at but to the extent that it's not additive to what we've laid out in our strategic plan, we certainly.

Peter Scott: Yeah. Hey, Mike, I just want to jump in for a second on this. I'm glad we're obviously talking about going on offense just a little bit. Our focus is first and foremost on our three-year growth framework and generating organic growth and reinvesting capital into our real estate. When we talk about going on offense, this is some modest balance sheet capacity that we have. If we can find ways to put that capital to work to generate some nice accretion, primarily in joint ventures where we get an enhanced yield, that's stuff that we will look at. To the extent that it's not additive to what we've laid out in our strategic plan, we certainly can remain under-levered.

Hey, Mike I, just wanted to jump in for a second on that I'm glad we're obviously talking about going on.

Offense, just a little bit, but our focus is first and foremost on our three year growth framework and generating organic growth and reinvest in capital into our real estate. When we talk about going on offense. This is some modest balance sheet capacity that we have and if we can find ways to.

<unk> remain under Levered, So I just want to be a little bit careful when everyone hears the term offense that all of a sudden we're disregarding our strategic plan and just looking at a bunch of acquisitions I mean, theres just some tuck in things that we would like to do.

Put that capital to work to generate some nice accretion primarily in joint ventures, where we get an enhanced yield that stuff that we will look at but to the extent that it's not additive to what we've laid out in our strategic plan, we certainly.

If the math penfolds, but we do not need to do those and our focus is primarily first and foremost on the strategic plan and the three year growth framework that we laid out.

Okay. That's helpful. I know I guess you also made a comment earlier in the call in the prepared remarks that given where occupancy is so you can be a little bit more aggressive pushing price I mean can you provide some color on what that means are you going to try to push it on spreads annual bumps.

Peter Scott: I just want to be a little bit careful when everyone hears the term offense that all of a sudden we're disregarding our strategic plan and just looking at a bunch of acquisitions. There are just some tuck-in things that we would like to do if the math pencils, but we do not need to do those. Our focus is primarily first and foremost on the strategic plan and the three-year growth framework that we laid out.

And is this kind of something new where is it that you can do just given that the market is getting tighter over the past.

If the math pencils, but we do not need to do those and our focus is primarily first and foremost on the strategic plan and the three year growth framework that we laid out.

Few quarters.

Yes, as we think about maximizing lease economics, we have implemented a payback period model as well as an IRR model over the last.

[Analyst]: Good. That's helpful. I know. Pete, you also made a comment earlier in the call in the prepared remarks that given where occupancy is, that you can be a little bit more aggressive pushing price. Can you provide some color on what that means? Are you going to try to push it on spreads, annual bumps, and is this kind of something newer that you can do just given that the market's getting tighter over the past few quarters?

Okay. That's helpful. I know I guess you also made a comment earlier in the call in the prepared remarks that given where occupancy is so you can be a little bit more aggressive pushing price I mean could you provide some color on what that means are you going to try to push it on spreads annual bumps.

A couple of quarters. So it is just trying to get the absolute best possible economic returns with all the leases that we ended up.

Signing I think where we're seeing success today is certainly on the escalator front. We're also seeing higher retention since theres, just a lot less supply out there and I think the last pieces.

And is this kind of a.

Numerous debt that you can do just given the end market is getting tighter over the past.

Few quarters.

Peter Scott: Yeah. As we think about maximizing lease economics, we have implemented a payback period model as well as an IRR model over the last couple of quarters. It's just trying to get the absolute best possible economic returns with all the leases that we end up, you know, signing. I think where we're seeing success today is certainly on the escalator front. We're also seeing higher retention since there's just a lot less supply out there. I think the last piece is, you think about the rent mark-to-market opportunity, which I think is helpful to get. We've been able to achieve kind of the low single digits. If occupancy continues to increase, then there's an opportunity to continue to move more and more, push harder and harder on that.

Yes, as we think about maximizing lease economics, we have implemented a payback period model as well as an IRR model over the last.

You think about that.

Rent mark to market opportunity, which I think is helpful to get we've been able to achieve kind of the low single digits. As occupancy continues to increase then there is an opportunity to continue to move more and more push harder and harder on that but I think most importantly, its the high retention.

A couple of quarters. So it's just trying to get the absolute best possible economic returns with all of the leases that we end up.

Signing I think where we're seeing success today is certainly on the escalator front. We're also seeing higher retention since theres, just a lot less supply out there and I think the last piece is.

As well as getting the strong escalators because high retention you have no downtime and you have no capital really that you have to invest there's limited capital you have to invest on renewals relative to new leasing. So that's the way we're thinking about it.

Do you think about that.

Rent mark to market opportunity, which I think is helpful to get we've been able to achieve kind of the low single digits. If occupancy continues to increase then there is an opportunity to continue to move more and more push harder and harder on that but I think most importantly, its the high retention.

Okay, great. Thank you.

Okay.

Our next question comes from Michael Gorman from BTG. Please go ahead. Your line is open.

Yes, thanks, good morning.

Maybe you could just spend a minute we've talked a lot about balance sheet strategy and productivity.

Peter Scott: I think most importantly, it's the high retention as well as getting the strong escalators because high retention, you have no downtime, and you have no capital really that you have to invest. There's limited capital you have to invest on renewals relative to new leasing. That's the way we're thinking about it.

As well as getting the strong escalators because.

Unsecured market has been pretty strong in the REIT space of late can you just talk about how youre thinking about access to that market into the end of the year and strategy around kind of the 26 maturities.

High retention you have no downtime and you have no capital really that you have to invest there's limited capital you have to invest on renewals relative to new leasing. So that's the way we're thinking about it.

Yeah. Good morning, Michael So it's a great question.

[Analyst]: Okay. Great. Thank you.

Okay, great. Thank you.

<unk>.

Peter Scott: Okay.

We have $600 million of.

Okay.

Operator: Our next question comes from Michael Gorman from BTIG. Please go ahead. Your line is open.

Our next question comes from Michael Gorman from BTG. Please go ahead. Your line is open.

The bond maturing in August of next year, So I would say first and foremost we do have a lot of time.

[Analyst]: Yeah. Thanks. Good morning. Austen, maybe you could just spend a minute, talk a lot about balance sheet strategy and proactivity. The unsecured market has been pretty strong in the REIT space of late. Can you just talk about how you're thinking about access to that market into the end of the year and strategy around kind of the 2026 maturities?

Yes, thanks, good morning.

Maybe you could just spend a minute you talked a lot about balance sheet strategy and productivity.

To add to that your point is not lost on us that especially since we put out the strategic plan rates up until maybe two days ago hadn't moved slightly in our favor and you are seeing spreads.

At or near all time lows. So it's certainly something that we're paying close attention to will be opportunistic I think given the amount of time that we have until the bond refinancing, but certainly could look at doing something if.

Peter Scott: Yeah. Good morning, Michael. It's a great question. We have $600 million of a bond maturing in August of next year. I would say first and foremost, we do have a lot of time. To add to that, your point is not lost on us, especially since we put out the strategic plan. Rates up until maybe two days ago had moved slightly in our favor, and you are seeing spreads at or near all-time lows. It's certainly something that we're paying close attention to. We'll be opportunistic, I think, given the amount of time that we have until the bond refinancing, but certainly could look at doing something if the opportunity and attractive opportunity presented itself.

Yeah. Good morning, Michael So it's a great question.

<unk>.

With $600 million of.

The bond maturing in August of next year, So I would say first and foremost we do have a lot of time.

The opportunity and attractive opportunity presented itself.

To add to that your point is not lost on us that especially since we put out the strategic plan rates up until maybe two days ago hadn't moved slightly in our favor and you are seeing spreads.

Sure.

That's helpful. Thanks, and then.

Maybe just switching to the portfolio side.

For the 2026.

Lease maturities can you just talk a little bit about how those backup compared to some of the escalators that you've been able to achieve in the third quarter.

And in May.

Maybe how the 26 explorations look relative to that just to give us a sense for the potential opportunity there.

Yeah.

Yes.

I think if you look out at 26, I mean, we've got a.

Yeah.

Good number of renewals coming up.

[Analyst]: That's helpful. Thanks. Maybe just switching to the portfolio side, for the 2026 lease maturities, can you just talk a little bit about how those stack up compared to some of the escalators that you've been able to achieve in the third quarter, and maybe how the 2026 expirations look relative to that just to give us a sense for the potential opportunity there?

That's helpful. Thanks, and then maybe just switching to the portfolio side for the 2026.

The escalators on the total portfolio right now I think are.

And the.

Averaging in the high twos.

Maturities can you just talk a little bit about how those backup compared to some of the escalators that you've been able to achieve in the third quarter.

I mentioned in my remarks that we've been achieving three one on average across all of the renewals and new leases in our new leases, we even achieved a little bit higher than that so I think as we look at it.

And maybe how the 26 explorations look relative to that just to give us a sense for the potential opportunity there.

26, we see an opportunity.

Yes.

Peter Scott: Yeah. I think if you look at it, 2026, I mean, we've got a good number of renewals coming up, and the escalators on the total portfolio right now, I think we're averaging in the high 2s. I mentioned in my remarks that we've been achieving 3.1% on average across all of the renewals and new leases, and in our new leases, we've even achieved a little bit higher than that. I think as we look out at 2026, we see an opportunity to kind of move that up over 3%. We've been consistently getting greater than 3% escalators. As supply tightens and the portfolio improves through asset sales, we see an opportunity to move that even potentially higher. Certainly looking at improving on the average that we have and achieved this quarter, as we look to next year, trying to move that up into the mid-3s.

Yes.

I think if you look out at 26, I mean, we've got a.

To kind of move that up over over three we've been consistently getting <unk>.

Good number of renewals coming up and the escalators on the total portfolio right now I think are in.

Greater than 3% escalators and <unk>.

As supply tightens and portfolio improves through asset sales, we see an opportunity to move that even potentially higher so certainly looking at improving on the the average that we have achieved this quarter as we look to next year trying to move that up into the mid threes.

In them.

Averaging in the high twos.

I mentioned in my remarks that we've been achieving three one on average across all of the renewals and new leases in our new leases.

Even achieved a little bit higher than that so I think as we look out at it too.

Yeah.

26.

Great. Thanks for the time guys.

We see an opportunity.

Our.

To kind of move that up over over three we have been consistently getting.

Next question comes from Mike Mueller from Jpmorgan. Please go ahead. Your line is open.

Greater than 3% escalators and as supply tightens and portfolio improves through asset sales, we see an opportunity to move that even potentially higher so certainly looking at improving on the the average that we have achieved this quarter as we look to next year trying to move that up into the.

Yes, hi.

Just how are you thinking about what's the right level of development redevelopment to have underway at any given time.

I know pre leasing levels come into it but just just a little more color on how you're thinking about that would be great.

Yeah.

Obviously on the development side those developments are legacy developments that have been ongoing for a while I would not expect us to commence a new development unless we do have that land bank unless it was a very very heavily pre leased attractive yield to us.

The mid threes.

Yeah.

[Analyst]: Great. Thanks for the time, guys.

Great. Thanks for the time guys.

Operator: Our next question comes from Mike Mueller from JPMorgan. Please go ahead. Your line is open.

Our next question comes from Mike Mueller from Jpmorgan. Please go ahead. Your line is open.

Ryan Crowley: Hi. How are you thinking about what's the right level of development, redevelopment to have underway at any given time? I know pre-leasing levels come into it, but just a little more color on how you're thinking about that would be great.

Yes, hi.

Just how are you thinking about what's the right level of development redevelopment to have underway at any given time.

And I would say, there's nothing imminent on the horizon on that from a redevelopment perspective.

Going to be a little bit higher.

I know pre leasing levels come into it but just a little more color on how you're thinking about that would be great.

Initially just because we're going to be reinvesting capital first and foremost into our portfolio and by the way, we see a pretty darn good yield from that as well.

Peter Scott: Yeah. Obviously, on the development side, those developments are legacy developments that have been ongoing for a while. I would not expect us to commence a new development unless we do have that land bank, unless it was a very, very heavily pre-leased attractive yield to us. I would say there's nothing imminent on the horizon on that. From a redevelopment perspective, you know, it's going to be a little bit higher initially just because we're going to be reinvesting capital first and foremost into our portfolio. By the way, we see a pretty darn good yield from that as well. You know, you would calculate something in the 9% to 12% cash-on-cash yield with the IRRs being even higher than that. It's a really good way to invest capital.

Yeah.

You would you would calculate something in the 9% to 12% cash on cash yield with the IRR as being even higher than that so it's a really good way to invest capital I think that bucket, we will have some asset cycle out some asset cycle in there've been some assets and redevelopment for a while that are near completion at this point in time, but.

And I would say, there's nothing imminent on the horizon on that from a redevelopment perspective.

I can see having.

It's going to be a little bit higher.

25 ish or so assets in that bucket and I would say on average, it's $10 million to $15 million of redevelopment spend across.

Initially just because we're going to be reinvesting capital first and foremost into our portfolio and by the way, we see a pretty darn good yield.

That as well.

Each project. So you can do the math on that but I think thats, probably a comfortable level for us going forward and we obviously have the free cash flow opportunity to do that as well with our payout ratio being in the low <unk> right now.

You would you would calculate something in the 9% to 12% cash on cash yield with the IRR as being even higher than that so it's a really good way to invest capital I think that bucket will have some asset cycle out some asset cycle in there have been some assets and redevelopment for a while that are near completion at this point in time, but.

Peter Scott: I think that bucket will have some assets cycle out, some assets cycle in. There have been some assets in redevelopment for a while that are near completion at this point in time. I could see having 25-ish or so assets in that bucket. I would say on average, it's $10 million to $15 million of redevelopment spend across each project. You can do the math on that, but I think that's probably a comfortable level for us going forward. We obviously have the free cash flow opportunity to do that as well with our payout ratio being in the low 70% right now.

Got it and one other question once you're through the 700 million of asset sales that are under contract letter of intent what should we be thinking of any additional.

I can see having.

<unk> 25 ish or so assets in that bucket and I would say on average, it's $10 million to $15 million of redevelopment spend across.

Dispositions on a go forward basis or just.

Something nominal and opportunistic as well.

I think it would just be nominal and opportunistic Mike there.

It would not be like a large program.

But perhaps there could be some.

Pruning on an annual basis.

Three year, but that would be just very nominal stuff and done opportunistically.

Ryan Crowley: Got it. One other question. Once you're through the $700 million of asset sales that are under contract or letter of intent, should we be thinking of any additional acquisitions or dispositions on a go-forward basis, or just something nominal and opportunistic as well?

Got it and one other question once you're through the $700 million of asset sales that are under contract letter of intent what should we be thinking of any additional.

Great. Okay. Thank you.

Thanks, Mike.

Our last question comes from John Polaski from Green Street. Please go ahead. Your line is open.

Dispositions on a go forward basis or just.

Hey, Thanks for the times two questions for me on the restructuring.

Something nominal and opportunistic as well.

Peter Scott: I think it would just be nominal and opportunistic, Mike. There would not be like a large program, but perhaps there could be some pruning on an annual basis, every year. That would be just very nominal stuff and done opportunistically.

I believe there was $12 million of restructuring costs this quarter $22 million ish in last two quarters can you just give us a sense of the total restructuring cost expected in there.

I think it would just be nominal and opportunistic Mike there.

Would not be like a large program.

But perhaps there could be some.

Pruning on an annual basis every year, but that would be just very nominal stuff and done opportunistically.

Just in general.

I know you guys are moving fast, but what kind of inning are we in terms of your organized.

Organizational restructuring of HR.

Ryan Crowley: Great. Okay, thank you.

Great. Okay. Thank you. Thanks.

Peter Scott: Thanks, Mike.

Yes, I think we are in the later innings on that.

Thanks, Mike.

Operator: Our last question comes from John Pawlowski from Green Street. Please go ahead. Your line is open.

Our last question comes from John Pawlowski from Green Street. Please go ahead. Your line is open.

But if you think about the organizational restructuring charges, but you also factor in that we had $2 million to $3 million less in G&A. This quarter right, it's working its way into less G&A.

[Analyst]: Hey, thanks for the time. Just two questions for me on the restructuring. I believe there's $12 million of restructuring costs this quarter, $22 million-ish in the last two quarters. Can you just give us a sense of the total restructuring costs expected, and just in general, Pete, like what I know you guys are moving fast, but what kind of inning are we in in terms of your organizational restructuring of Healthcare Realty Trust?

Hey, Thanks for the times two questions for me on the restructuring.

I believe there was $12 million of restructuring costs. This quarter 22 million ish in last two quarters can you just give us a sense of the total restructuring cost expected and then just some general Pete.

A smaller cost structure. So I would say we've made really good progress are we done we're getting closer to that level, but we're certainly in the later innings.

I know you guys are moving fast, but what kind of inning are we in terms of your organized.

Okay.

Organizational restructuring of HR.

And then last one for me I know you guys highlighted in your strategic.

Peter Scott: Yeah. I think we're in the later innings on that. If you think about the organizational restructuring charges, but you also factor in that we had $2 to $3 million less of G&A this quarter, right? It's working its way into less G&A, a smaller cost structure. I would say we've made really good progress. Are we done? We're getting closer to that level, but we're certainly in the later innings.

Yes, I think we're in the later innings on that.

Our review document.

But if you think about the organizational restructuring charges, but you also factor in that we had $2 million to $3 million less in G&A. This quarter right, it's working its way into less G&A.

A little bit of a drag from 100000.

Square foot single tenant lease expiration in 2007.

Has there been any other additional single tenant vacates that we should expect in 2006 and when you have a lot of a lot of lease roll in the single tenant portfolio and 2007, so any other.

A smaller.

Cost structure. So I would say we've made really good progress are we done.

Getting closer to that level, but we're certainly in the later innings.

Vacates that popped up in recent months that we should be aware of.

[Analyst]: Okay. Last one for me, I know you guys highlighted in your strategic review document a little bit of a drag from 100,000 square foot single-tenant lease expiration in 2027. Is there been any other additional single-tenant vacates that we should expect in 2026? You have a lot of lease rolling in the single-tenant portfolio in 2027. Any other vacates have popped up in recent months that we should be aware of?

Okay.

Yes, no I'd say nothing material, obviously, we highlighted the 27, one in the strategic deck and that really is the <unk>.

And then last one for me I know you guys highlighted in your strategic.

Review document.

Little bit of a drag from 100000.

A large lease roll in 2027.

Square foot single tenant lease expiration in 2007.

That tenant occupies two buildings, we are having conversations with them on extending in the entire other building that they are in.

Has there been any other additional single tenant vacates that that we should expect in 2006. When you have a lot of a lot of leases rolling in the single tenant portfolio and 2007, so any other vacates that popped up in recent months that we should be aware of.

So I'd say, we're making good progress on that but no to your question is there anything additional that popped up now there is not.

Okay. Thanks for the time.

Peter Scott: Yeah. No, I'd say nothing material. Obviously, we highlighted the '27 one in the strategic deck. That really is the large lease roll in 2027. That tenant occupies two buildings. We are having conversations with them on extending in the entire other building that they are in. I'd say we're making good progress on that. To your question, is there anything additional that's popped up? No, there is not.

Yes, no I'd say nothing material, obviously, we highlighted the 27, one in the strategic deck and that really is the large lease roll in 2027.

We have no further questions I'd like to turn the call back over to Scott for any closing remarks.

Great. Thanks, everyone for joining us here like I said, we're very excited about the direction that we're headed in HR 2.0 and.

That tenant occupies two buildings, we are having conversations with them on extending in the entire other building that they are in.

I'm proud of the quarter, we put up and look forward to continuing to talk to you over the coming months as we finish out the year. Thanks very much.

So I'd say, we're making good progress on that but no to your question is there anything additional that popped up now there is not.

This concludes today's conference call. Thank you for your participation you may now disconnect.

[Analyst]: Okay, thanks for the time.

Okay. Thanks for the time.

Operator: We have no further questions. I'd like to turn the call back over to Mr. Pete Scott for any closing remarks.

We have no further questions I'd like to turn the call back over to you.

Scott for any closing remarks.

Peter Scott: Great. Thanks, everyone, for joining us here. Like I said, we're very excited about the direction that we're headed in, in HR 2.0, and proud of the quarter we put up and look forward to continuing to talk to you over the coming months as we finish out the year. Thanks very much.

Great. Thanks, everyone for joining us here like I said, we're very excited about the direction that we're headed in an HR two points.

Proud of the quarter, we put up and look forward to continuing to talk to you over the coming months as we finish out the year. Thanks very much.

Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.

This concludes today's conference call. Thank you for your participation you may now disconnect.

Yeah.

Q3 2025 Healthcare Realty Trust Inc Earnings Call

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