HR Stock Forecast & Price Target

Healthcare Realty Trust is attractive because it is the only pure-play public medical office building REIT, giving it a focused platform, strong health system relationships, and a curated portfolio concentrated in on- or adjacent-campus assets that are integral to hospital operations. Its 562-property, 32.8 million square foot portfolio, with major tenant relationships such as HCA, Baylor Scott & White, and CommonSpirit, is positioned to benefit from replacement costs that exceed existing rents and from the expectation that the MOB sector can generate 3%+ organic growth, supporting mid-single digit earnings growth over time. Although same-asset cash NOI fell 3.5% year over year and occupancy slipped to 91.3%, the company’s strategic plan to strengthen tenant relationships, improve portfolio quality, and pursue better risk-adjusted external investments provides a credible path to improving FFO growth as operational execution normalizes.

Healthcare Realty Trust is viewed negatively because its core MOB and outpatient portfolio, while defensive, is delivering only modest organic growth and faces uncertainty around a strategic plan and a potentially slow lease-up process that could take time to stabilize. The company’s reported recurring FFOPU of $0.282 declined 9.3% q/q and 4.6% y/y, commercial occupancy is expected to fall 120bp in 26E and 27E, and the large $392 million development and redevelopment pipeline plus the planned $300 million lease-up investment may not translate into the targeted NOI and earnings accretion if tenant demand underwhelms. Although leverage has improved to 5.6x net debt to EBITDA and liquidity rose to $966 million, the stock’s appeal is muted by a market preference for higher-growth property types, the likelihood that buybacks are less attractive at current levels, and the fact that much of the upside depends on execution across acquisitions, dispositions, and development stabilization rather than clear underlying acceleration.