SCOTTSDALE, Ariz., June 1, 2020 /PRNewswire/ -- Healthcare Trust of
America, Inc. (NYSE: HTA) ("HTA") provided an interim update on its
business operations through May 31,
2020.
HTA Portfolio Composition
Our tenants primarily
consist of health systems, universities, physicians, and healthcare
service providers, such as imaging companies, surgery center
operators, and pharmacies, of various size and complexity. As of
March 31, 2020, our tenants consisted
of (i) Health Systems / Universities – 60% of annualized base rent
("ABR"); (ii) National / Large Regional Healthcare Providers and
Companies – 13%; and (iii) Local Healthcare Providers – 27%. In
addition, approximately 62% of our tenants, by ABR, are credit
rated, with approximately 47% coming from investment grade rated
tenants.
Buildings & Tenant Activity
HTA internally
manages approximately 98% of our portfolio, giving us direct access
to our properties and tenants. To date:
- All of our properties continue to remain open and
operational.
- Our property managers have reported increasing levels of
patient traffic and activity at our buildings in all markets,
although markets in the South and Midwest are reporting more
activity than those in the Northeast or West Coast. Approximately
96% of our clinical tenants are now open and seeing patients. This
is up from 85% as of the end of April.
- All of our markets have now announced plans to allow
non-essential and elective surgeries in the near future. As of
today, over 94% of our tenants are able to schedule and perform
non-essential procedures.
- To accommodate increased patient flow and longer requested
building hours, we have increased our level of janitorial cleanings
and on-site building maintenance staff. We have also added
increased signage regarding personal hygiene and are providing
higher levels of sanitation products in the building common
areas.
Leasing & Occupancy
We continue to see
steady occupancy levels and leasing activity in our portfolio,
highlighted by:
- Occupancy – Our total portfolio occupancy as of the end of May
was 89.9%, which was flat from the end of March.
- Leasing – Our leasing activity continues to remain steady, with
most tenants focused on renewing in place while they work through
the re-opening of their practices and seeing patients. In April and
May, we signed over 685,000 square feet of leases, which includes
approximately 48,000 square feet of new leasing and approximately
637,000 square feet of renewal leasing. Of this, approximately
450,000 square feet of renewals were from tenants whose leases
expire beyond 2020. We currently anticipate early renewals could
total up to one (1) million square feet of GLA over the next 90
days. These early renewals lock in tenants at existing rates, with
minimal amounts of concessions outside standard free rent
arrangements. As a result of these early renewals, we currently
anticipate having between $2.5
million and $5.0 million of
incremental free rent provided to tenants spread between Q2 and Q3.
While these are earnings neutral, it will reduce our cash NOI which
is reported in same store growth.
Cash Flows & Rent Deferrals
- Rent Collections: In April and May, we collected approximately
96% of the total amount of recurring monthly rents that are
contractually due and owed. This includes collecting approximately
94% for May. In May, we also collected additional cash that totals
an additional 5% of monthly contractual rents related to prior
months or direct billings.
- Rent Deferrals: The number of rent deferral requests we have
received has slowed significantly over the last month. We now
expect that our total rent deferrals will not exceed 10% of one
quarter's contractual rent, or more than $18
million in total. These deferrals are being made to a mix of
local physician groups, national health care providers, and health
systems. The majority of deferrals will be taken between May and
July, and have repayment periods between 6 and 12 months starting
at the end of 3Q. Larger tenants generally must repay deferred
rents by year-end. It should be noted that a number of tenants who
were granted deferrals elected to pay May rents and potentially
extend their deferral period by 1 month.
Balance Sheet and Capital Markets
- Balance Sheet: HTA ended Q1 2020 with total leverage of
(i) 33.7%, measured as debt less cash and cash equivalents to total
capitalization, and (ii) 5.6x net debt to Adjusted Earnings before
Interest, Taxes, Depreciation and Amortization for real estate
("Adjusted EBITDAre"). Including the impact of the unsettled
forward equity, leverage would be 30.3% and 5.1x, respectively,
using the definitions from above.
- HTA ended Q1 with total liquidity of $1.1 billion, inclusive of $595.0 million available on our unsecured
revolving credit facility, $277.5
million of unsettled equity sold under forward agreements,
and $216.5 million of cash and cash
equivalents. HTA continues to have very limited near term debt
maturities, with less than $7 million
obligated before our revolving credit facility matures in June of
2022.
- Post Quarter Activity: Following quarter end, we drew
down the remaining $595 million on
our credit facility, increasing our pro forma cash position to
almost $800 million. We have since
repaid $505 million of borrowing on
the credit facility and ended May with total liquidity of
$1.04 billion, consisting of
approximately $257 million of cash,
revolving credit facility availability of approximately
$506 million, and forward equity of
approximately $278 million.
About Healthcare Trust of America, Inc.
Healthcare
Trust of America, Inc. (NYSE: HTA) is the largest dedicated owner
and operator of MOBs in the United
States, comprising approximately 24.9 million square feet of
GLA, with $7.3 billion invested
primarily in MOBs as of March 31,
2020. HTA provides real estate infrastructure for the
integrated delivery of healthcare services in highly-desirable
locations. Investments are targeted to build critical mass in
20 to 25 leading gateway markets that generally have leading
university and medical institutions, which translates to superior
demographics, high-quality graduates, intellectual talent and job
growth. The strategic markets HTA invests in support a strong,
long-term demand for quality medical office space. HTA utilizes an
integrated asset management platform consisting of on-site leasing,
property management, engineering and building services, and
development capabilities to create complete, state of the art
facilities in each market. This drives efficiencies, strong
tenant and health system relationships, and strategic partnerships
that result in high levels of tenant retention, rental growth and
long-term value creation. Headquartered in Scottsdale, Arizona, HTA has developed a
national brand with dedicated relationships at the local level.
Founded in 2006 and listed on the New York Stock Exchange in
2012, HTA has produced attractive returns for its stockholders that
have outperformed the S&P 500 and US REIT index. More
information about HTA can be found on the Company's Website
(www.htareit.com), Facebook, LinkedIn and Twitter.
Forward-Looking Language
This press release contains
certain forward-looking statements with respect to
HTA. Forward-looking statements are statements that are not
descriptions of historical facts and include statements regarding
management's intentions, beliefs, expectations, plans or
predictions of the future, within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Because such
statements include risks, uncertainties and contingencies, actual
results may differ materially and in adverse ways from those
expressed or implied by such forward-looking statements. These
risks, uncertainties and contingencies include, without limitation,
the following: changes in economic conditions generally and the
real estate market specifically; legislative and regulatory
changes, including changes to laws governing the taxation of REITs
and changes to laws governing the healthcare industry; the
availability of capital; changes in interest rates; competition in
the real estate industry; the supply and demand for operating
properties in our proposed market areas; changes in accounting
principles generally accepted in the
United States of America; policies and guidelines applicable
to REITs; the availability of properties to acquire; the
availability of financing; and pandemics and other health concerns,
and the measures intended to prevent their spread, including the
currently ongoing COVID-19 pandemic, and potential material adverse
effect these may have on our business, results of operations, cash
flows and financial condition. Additional information
concerning us and our business, including additional factors that
could materially and adversely affect our financial results,
include, without limitation, the risks described under Part I,
Item 1A - Risk Factors, in our 2019 Annual Report on Form 10-K
and in our filings with the SEC.
Financial Contact:
Robert A. Milligan
Chief Financial Officer
480.998.3478
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SOURCE Healthcare Trust of America, Inc.