Healthcare Realty Targets 3.5%-4.5% NOI Growth and Plans $175M Asset Sales
Healthcare Realty expects 2026 same-store NOI growth of 3.5%-4.5% after achieving 4.8% in 2025, driven by escalators, retention in mid-80% and positive absorption. The REIT plans $175M of dispositions, holds $200-300M acquisition capacity and targets acquisitions only at yields above its implied cap rate.
1. Q4 2025 Performance and Leasing Trends
Healthcare Realty reported same-store NOI growth of 4.8% in 2025, supported by over 100 basis points of positive absorption. Lease deal spreads averaged more than 3%, with tenant retention rates trending in the mid-80% range, underscoring robust leasing activity across its outpatient medical portfolio.
2. 2026 Financial Outlook and Guidance
For 2026, the company forecasts same-store NOI growth of 3.5% to 4.5%, driven by rent escalators, retention, absorption and cash leasing spreads. Normalized FFO is expected to remain flat at $1.61 per share, with flat FAD of $1.26 incorporating maintenance capital expenditures.
3. Capital Allocation and Balance Sheet Strategy
Healthcare Realty holds $200M to $300M of balance sheet capacity and will pursue acquisitions only if yields exceed its implied cap rate. The REIT has embedded $175M of asset sales in its guidance, including $70M closing early 2026, a $45M loan repayment in March and $60M of additional dispositions, while exploring expanded investments with existing joint venture partners.