HR Offers Significant Growth Opportunities

Analysts at KeyBanc Capital Markets initiate coverage of Healthcare Realty Trust Incorporated (NYSE: HR) with a “hold” rating.

Healthcare Realty Trust’s medical office portfolio enjoys a niche status in the current real estate environment. The analysts expect the demand for medical office space to grow, given the aging Baby Boomer population and healthcare reform initiatives.

Healthcare Realty Trust’s three-to-five years lease terms is shorter than those in other healthcare sub-sectors. This enables the company to respond more quickly in fixing prices to changes in demand. External growth opportunities for HR are expanding, since declining acquisition pricing and healthcare reform are spurring hospital systems to seek private capital through asset sales or new development, the analysts say. The company’s development pipeline may dilute near-term earnings, KeyBanc Capital Markets adds.