Healthcare: Healthcare Realty wraps up big M&A quarter

By Geert De Lombaerde for Nashville Post

Healthcare Realty Trust late last month closed on a $70 million purchase – its largest single deal in years – in Texas, putting a bow on a buying spree driven in part by regulatory uncertainty.

The Nashville-based real estate investment trust’s latest purchase of four medical office buildings in The Woodlands, north of Houston, added 273,000 square feet of space to its portfolio.

For the third quarter, the company spent $138 million to grow its holdings by almost 600,000 square feet, or about 4.7 percent of its June 30 ownership portfolio. In addition to its Texas deal, the company also has snapped a total of four buildings in Colorado, Indiana and Ohio.

A company spokeswoman said the recent acquisition spurt isn’t indicative of a broader shift at Healthcare Realty. Year to date, the company has spent about $152 million on acquisitions, in line with its guidance of $150 million to $200 million. But it is seeing more deals because of doubts about tax policies coming out of Washington.

“We have seen sellers motivated to close transactions prior to year end in order to avoid uncertainty about taxes in 2011,” Gabrielle Andrés told in an e-mail.

Shares of Healthcare Realty (Ticker: HR) have risen almost 11 percent so far this year. That gain trails the roughly 17 percent improvement in the Dow Jones US Real Estate Investment Trusts Index over that time.

On the flip side to the acquisitions, Healthcare Realty also disclosed recently that it will take a third-quarter impairment charge – its first of 2010 – of between $7.2 million and $7.7 million related to the sale or planned sale of six properties. (The disposition of a building in Houston was completed Sept. 30.)

Offsetting that to some extent is a $4.6 million gain the company has booked on the sale of a Florida property. Through the first half of this year, the company booked gains on sale of $4.2 million.


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