Healthcare Realty Trust Incorporated HR disclosed the sale of 2 single-tenant net lease properties in Indianapolis, IN for $97.0 million on Jun 30, 2015. The move came as part of the company’s portfolio repositioning efforts.
The 2 properties encompass a total space of 176,000 square feet. One among them is an 118,000-square foot orthopedic inpatient surgical hospital, while the other is an attached 58,000-square foot medical office building.
Notably, in case of net lease properties, the tenant, besides paying rent, bear some or all other property expenses such as real estate taxes, insurance, maintenance, repairs, utilities, and other costs, which are usually paid by the landlord.
We believe the dispositions have helped the company reap decent capital, for reuse in its growth needs. As matter of fact, during the first quarter, this Nashville, TN-based healthcare real estate investment trust (“REIT”), which is focused on real estate properties mainly related to outpatient healthcare services across the U.S., purchased a medical office building in California for $39.3 million. Spanning 111,000 square feet and located near 2 hospital campuses, this property is 97% leased.
Moreover, the company started 2 redevelopment projects in Tennessee and Alabama, with budgets aggregating $63.2 million. The company also had leases in place for 88% of the total space of 432,000 square feet.
We believe an increasing elderly population, rising national healthcare expenditure and an expected rise in demand for medical office buildings will offer Healthcare Realty ample opportunities to grow and enhance profitability. Yet, an anticipated rise in interest rate and strong competition might limit the company’s growth tempo.
Healthcare Realty currently has a Zacks Rank #2 (Buy). Investors interested in the REIT industry may also consider stocks like Hersha Hospitality Trust HT, Hospitality Properties Trust HPT and Ventas, Inc. VTR. All these stocks hold the same Zacks Rank as Healthcare Realty.
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