Weekly Real Estate News
Summary
Healthcare Realty Trust reported 5.1% same-store cash net operating income growth in Q3 2026, executed 1.5 million square feet of leases and increased its full-year normalized FFO guidance to $1.65–$1.67 per share. It reported a $15.8 million GAAP net loss, and said its joint venture with KKR acquired $211 million in assets, of which approximately $42 million represented its share.
Healthcare Realty Trust raised its full-year earnings outlook after medical-office properties delivered stronger rent growth and leasing in the third quarter, providing a contrast with the uneven recovery in conventional office markets.
The Nashville-based real estate investment trust said October 29 results showed same-store cash net operating income rising 5.1% from a year earlier. The company executed 329 new and renewal leases covering 1.5 million square feet, including about 430,000 square feet of new leasing. Average cash rent spreads on leases were 8.6%, and tenant retention was 88%.
Healthcare Realty now expects normalized funds from operations of $1.65 to $1.67 per diluted share in 2026, raising the midpoint by two cents from its July forecast. It also increased its same-store cash NOI growth forecast to a range of 5% to 5.25%. These are management projections, subject to changes in leasing, expenses and market conditions.
GAAP losses and property operating performance
On a generally accepted accounting principles basis, the REIT reported a $15.8 million quarterly net loss, equivalent to five cents per share. Its normalized FFO was 42 cents per diluted share, compared with 41 cents a year earlier. FFO excludes certain property-related accounting items and should not be mistaken for GAAP net income or unrestricted cash flow.
Healthcare tenants support leasing
Hospital-system tenants continued to underpin leasing activity. The company cited 203,000 square feet of new and renewal agreements involving Ascension Health in Nashville, 59,000 square feet of renewals with Cedars-Sinai in Los Angeles and additional transactions with Mount Carmel Health System and Indiana University Health.
Healthcare Realty also reported acquisitions totaling $211 million through its strategic joint venture with KKR since the prior quarter, with approximately $42 million attributable to Healthcare Realty’s share. The gross transaction total should not be read as $211 million of spending by the REIT alone. Transactions included two health-system-anchored medical office buildings in Charleston, South Carolina, for $56 million and a Seattle medical building for $17 million.
The company disposed of $68 million in assets since the preceding quarter, bringing year-to-date property sales to $136 million. In Chicago it sold two properties for a combined $23 million and said its remaining local property was under contract. That final sale has not yet been completed, so the planned market exit remains contingent on closing.
Healthcare Realty repurchased 4.2 million shares for $75 million through early October and renewed a share-buyback authorization of up to $500 million. Its net debt to adjusted EBITDA stood at 5.5 times at September 30, leaving leverage an important consideration alongside its improved operating guidance.
Medical outpatient buildings benefit from tenants tied to clinical services, but those leases still face refinancing, capital and occupancy risks. Elsewhere in the office market, Allied Properties recently cut its distribution sharply to preserve cash for debt reduction. The two companies operate different property portfolios; their results illustrate why property type and financing structure matter more than a single broad label of ‘office real estate.’
Healthcare Realty is scheduled to discuss its results on October 30. Investors will be watching for more detail on leasing economics, the pace of KKR joint-venture purchases and the company’s planned asset disposals.
