Healthcare Realty Raises 2026 Same-Property Net Cash Income Growth Guidance to 5.25%
Key Facts
Healthcare Realty Trust raised its 2026 guidance for same-property net cash income growth to a range of 5.00%–5.25% on October 29, its third guidance increase this year, the company said. The previous range, issued in July, was 4.25%–5.00%, lifting the low end by 75 basis points and the high end by 25 basis points. The company also raised its adjusted funds from operations guidance to $1.65–$1.67 per diluted share, an increase of two cents at the midpoint compared with its July guidance. The revisions accompanied third-quarter results that included growth in operating metrics and funds from operations, alongside a loss under GAAP. The company’s announcement did not attribute the higher outlook to a single factor, presenting the revision alongside quarterly operating results.
Same-property net cash income growth was 5.1% in the third quarter, tenant retention was 88.0%, and average cash rent spreads were 8.6%, the company said. The CEO said demand for space and rents were rising, and said the company had raised its guidance for the third time in 2026. The chief operating officer said cash rent spreads of 8.6% were the company’s highest in about a decade. By comparison, in the third quarter of 2025 same-property net cash income growth was 5.4%, tenant retention was 88.6%, and cash rent spreads were 3.9%. Thus, rent spreads rose from their level a year earlier, while tenant retention edged down and growth in the same-property cash income metric slowed.
The company signed 329 new and renewed leases during the quarter, covering a total of 1.5 million square feet, according to its results statement. The leases had a weighted average term of 5.9 years, with average annual rent increases of 3.1%. These figures came alongside the 8.6% cash rent spread, which the chief operating officer described as the highest in about a decade. The signed leases were part of the leasing activity the company reported alongside its updated annual outlook, while the CEO pointed to rising demand for space and rents. The announcement presented cash income growth, tenant retention and rent spreads as quarterly operating metrics without identifying any one of them as the sole reason for raising guidance.
On the financial results, the company reported a GAAP net loss of $0.05 per share in the third quarter, compared with a loss of $0.17 per share in the same period of 2025. By contrast, NAREIT funds from operations came to about $0.38 per diluted share, versus $0.34 a year earlier. Adjusted funds from operations were $0.42 per diluted share, compared with $0.41 in the third quarter of 2025. These measures distinguish the accounting loss from the funds from operations metrics reported by the company, while it raised its annual outlook for the adjusted measure. Quarterly revenue was $286.64 million, exceeding the analyst estimate of $275.71 million, but earnings per share were negative $0.05 against an estimate of positive $0.01, according to Investing.com.
On capital allocation, Healthcare Realty renewed its share repurchase program for 12 months on October 26, with authorization of up to $500 million. The board also approved a cash distribution of $0.24 per share, payable on November 20 to shareholders of record on November 10. Liquidity was about $1.6 billion on September 30, while net debt to adjusted earnings before interest, taxes, depreciation and amortization was 5.5 times. Across its asset portfolio, the strategic joint venture with KKR acquired $211 million in assets, of which the company’s share was about $42 million, while it sold $68 million in assets during the period from the prior quarter through the results announcement. These figures place the buyback, distribution, liquidity and property transactions within the capital picture accompanying the guidance update.
The company’s shares closed at $18.13 on October 29, according to Investing.com, which also reported that the stock fell 13.71% in the three months through that date and rose 2.08% over 12 months. The company announced the guidance increase on October 29, before the October 30 session; therefore, the closing price did not precede the announcement as stated in the initial version. The company’s conference call to discuss third-quarter results, operations and industry trends was scheduled for October 30, 2026, at 9:00 a.m. Eastern time. The cash distribution is payable on November 20 to shareholders of record on November 10, according to the board’s decision. The company’s update covers its 2026 operating and financial outlook alongside third-quarter metrics, leasing activity and asset management.