Healthcare Realty Trust Incorporated (NYSE:HR) Q4 2019 Earnings Conference Call - Final Transcript
Feb 13, 2020 • 10:00 am ET
Good day, and welcome to the Healthcare Realty Trust Fourth Quarter 2019 Financial Results Conference Call and Webcast. [Operator Instructions] I'd now like to turn the conference over to Mr. Todd Meredith, CEO. Please go ahead.
Thank you, Nick. Joining me on the call today are Carla Baca, Bethany Mancini, Rob Hull and Kris Douglas. Ms. Baca, If you could read the disclaimer.
Except for the historical information contained within, the matters discussed in this call may contain forward-looking statements that involve estimates, assumptions, risks and uncertainties. These risks are more specifically discussed in the Form 10-K filed with the SEC for the year ended December 31, 2019. These forward-looking statements represent the Company's judgment as of the date of this call. The Company disclaims any obligation to update this forward-looking material. The matters discussed in this call may also contain certain non-GAAP financial measures, such as funds from operations, FFO, normalized FFO, FFO per share, normalized FFO per share, funds available for distribution, FAD, net operating income, NOI, EBITDA and adjusted EBITDA.
A reconciliation of these measures to the most comparable GAAP financial measures may be found in the Company's earnings press release for the fourth quarter ended December 31, 2019. The Company's earnings press release, supplemental information, Forms 10-Q and 10-K are available on the Company's website. Todd?
Thank you, Carla. I will focus on three key topics today. First, the increased momentum of FFO per share growth in 2019. Second, Healthcare Realty's key building blocks for growth, including a higher level of net investment. And third, our positive outlook for 2020.
Healthcare Realty reported strong results for the fourth quarter and full year 2019. Normalized FFO per share grew from $1.57 in 2018 to $1.60 per share in 2019. Momentum increased throughout the year built on solid fundamentals of sustainable internal and external growth. Our portfolio again performed well with same-store NOI growing right in line with expectations around 3%. Most importantly, our focus is on driving steady revenue growth with contractual rent increases, tenant retention and cash leasing spreads. We also contained expenses quite well, which accelerated NOI for the multi-tenant properties. 2019 external growth was led by robust acquisition volume, approaching $400 million, nearly double our historical pace. Equally important, we sold far fewer properties than in recent years. It's worth noting we sold some of our last post-acute properties in 2019, along with a handful of MOBs at more indicative cap rates.
Following a period of costly dispositions and reducing leverage, Healthcare Realty's portfolio and balance sheet are in great shape. With the environment for medical office and -- while the environment for medical office investment remains competitive, our confidence to invest at an attractive pace is based on our established relationships, financial strength and access to accretive capital. A key part of our strategy is to avoid bidding wars and portfolio premiums is often as possible. In 2019, we sourced nearly 70% of our acquisitions working directly with owners and brokers before the properties