This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

How a Little-Known REIT Made It to the Big Leagues

Stocks in this article: HTA

NEW YORK ( TheStreet) -- Who says REITs that aren't publicly traded can't make it to the big leagues?

In light of the recent negative publicity associated with the non-listed REIT sector, Healthcare Trust of America (HTA) has been a beacon for investors wanting to achieve portfolio diversification without stock market volatility. In general, the evolution of the non-traded fixed-income alternative has gained broader acceptance as a durable REIT class that is differentiated by its defensive stability, low volatility and sustainable income.

On June 6, Healthcare Trust of America tapped the public markets by listing its shares on the New York Stock Exchange. The REIT's current investors will be able to access targeted full-cycle liquidity while also achieving full investor confidence in an industry that is perceived to be less mainstream. This is a significant milestone for the company as well as the REIT industry as bad news has plagued several non-traded REIT sponsors like Apple REIT, Inland Group, Behringer Harvard and others.

Healthcare Trust of America, based in Scottsdale, Ariz., is a fully integrated, self-administered health-care REIT that focuses on acquiring, owning and operating high-quality medical-office buildings that are located on the campuses of nationally recognized health-care systems. The company has invested about $2.5 billion to create an enterprise with operations in 27 states comprising over 12.4 million square feet. Fifty-seven percent of HTA's tenants are credit-rated, with 39% having investment-grade ratings. Most of the portfolio was acquired during the economic downturn, when most of the other buyers were on the sidelines.

Healthcare Trust of America is well-positioned to take advantage of the considerable tailwinds expected to grow from the defensive sector. The medical-office sector will benefit from several macro-economic trends, including the recently confirmed Patient Protection and Affordable Care Act, aging U.S. population and the increasing pace of health-care expenditures.

In 2010, HTA's shareholders approved a phased-in liquidity program that allows a quarter of the existing shares to become eligible to trade every six months. This program allows for a measured, patient and structured entry into the public markets. It also gives the company time to introduce itself to new investors.

Healthcare Trust of America is focused almost exclusively on the medical-office building sector. Within the sector, medical office is considered to have the lowest risk profile. It has the lowest exposure to government reimbursement. It also is driven by traditional real estate fundamentals and is not dependent upon the success or failures of a single operating company. Additionally, it allows the company to concentrate all of its efforts on maintaining and building relationships with health systems and developers in this sector, relationships that are key to long-term success.

Healthcare Trust of America has a very diverse portfolio, consisting of buildings in 27 states and tenanted by a large number of health systems and medical practices. The Greenville Hospital System (South Carolina) is the largest tenant, with just under 6% of the annual base rent.

Healthcare Trust of America is an investment-rated company, receiving investment-grade ratings from the leading rating agencies in the summer of 2011. The company earned those by retaining very low leverage throughout the economic downturn and investing in a very stable, defensive asset class. As of June 30, HTA's debt-to-enterprise-value was only 27.4%. These ratings have enabled the company to access the lower-cost, unsecured debt markets and lower overall borrowing costs. As a publicly traded company, HTA intends to maintain a low-to-moderate capital structure and access the public debt markets in the future.

Healthcare Trust of America offers a compelling opportunity to investors. The company is an investment-grade company in a defensive asset class with 91% occupancy, which offers a dividend yield of 6.12%. This compares favorably to health-care REIT peers, most of whom are offering dividends below 5%. HTA has a market value of $2.015 billion and its current stock price is $9.40 per share.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,790.90 +12.75 0.07%
S&P 500 2,066.68 +5.45 0.26%
NASDAQ 4,761.8450 +13.4490 0.28%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs