Insurance giant Prudential has become the first institutional investor to declare a major stake in newly public medical real estate investment vehicle Community Healthcare Trust. Prudential officials on Monday filed papers saying they now own more than 740,000 shares of Brentwood-based Community Healthcare Trust. That equates to a stake of no less than 11.3 percent. Community Healthcare Trust shares (Ticker: CHCT) ended Monday trading at $18.15. They went public at $19 three months ago.
The board of newly public Community Healthcare Trust has declared the company’s first dividend. Shareholders of record as of Aug. 20 will in early September receive 14.2 cents. That equates to an annualized payout rate of $1.50 and a dividend yield of about 8 percent. Shares of Community Healthcare Trust (Ticker: CHCT) are down slightly this morning to $18.29. They went public in May at $19.
Analyst Steve Manaker at Oppenheimer has launched coverage of newly public Community Healthcare Trust with an 'outperform' rating and a price target of $21. A key in his analysis is the type of properties CEO Tim Wallace and his team are targeting: "The key for us is not just management's ability to underwrite the real estate but also the importance of a tenant's place in the local healthcare ecosystem." Community Healthcare Trust (Ticker: CHCT) is changing hands this morning at about $19.10.
Manaker's colleague Mohan Naidu has begun covering shares of population health management company Healthways (Ticker: HWAY) with a neutral rating. Among his concerns are how the exit of former CEO Ben Leedle might hurt contract renewals and the long-term impact of health insurance exchanges on Healthways' work with large employers.
Mizuho analysts have hiked their rating on shares of Healthcare Realty Trust to 'buy' from 'neutral' and lifted their price target to $28 from $26. The upgrade is due in part to their optimism about REITs in general but they also note that Nashville-based Healthcare Realty (Ticker: HR) is a better value after its 11 percent year-to-date drop and that its "more granular" approach to business will serve it well going forward.
Healthcare Realty Trust executives have hired JPMorgan Securities, Barclays Capital and Jefferies to run an offering of 10-year unsecured notes. The Nashville-based company isn't yet specifying a dollar figure but in an SEC filing says it will be less than $334 million, the amount it expects to pay to redeem $300 million worth of 6.5 percent notes that will mature in 2017.
"The redemption of all of the outstanding senior notes due 2017 will require funds in excess of the expected proceeds of this offering and the Company anticipates funding the additional amounts needed from borrowings on its unsecured credit facility and proceeds from the sale of real estate assets through the year," the filing says.
Shares of Healthcare Realty (Ticker: HR) opened Wednesday trading at $26.76 and are down slightly so far this year.
Analysts at Fitch Ratings have lifted their ratings on the debt of Healthcare Realty Trust to BBB from BBB-. The move, they say, reflects the real estate investment trust's shrinking leverage — total debt relative to recurring operating EBITDA has come down to 6.5x from 8.8x at the end of 2010 — and the steady growth of its cash flows.
Similarly, HR has retained 83% of its expiring tenants on average versus 67% for suburban office REITs and with significantly less variation (77% - 89% vs. 51% - 82%) over this same time period. While the magnitude of HR's outperformance has decreased as suburban office fundamentals improve, the low absolute (and relative) volatility is a key rating driver.
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