HR - Healthcare Realty: Financials Overshadow The Portfolio Advantages

2024-04-11 12:35:06 ET

Summary

• Healthcare Realty is a leading company in the medical office building segment with a focus on multi-tenant leases.
• The company's portfolio is strategically located near dense campus territories, ensuring consistent demand for medical office buildings.
• Despite attractive valuations, risks such as insufficient FAD generation and excessive leverage make Healthcare Realty a too speculative investment for my taste.
• In this article, I elaborate on the key advantages and disadvantages of HR, outlining the aspects, which, in my opinion, are strong enough to keep investors from adding this REIT.

Healthcare Realty (HR) is a U.S. based equity REIT, which owns and operates properties in the outpatient medical space having more than 680 buildings in its portfolio. The Company has a market cap of ~$5.6 billion, which is more or less aligned with the health care REIT average market cap level....

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