By Svea Herbst-Bayliss

BOSTON, July 1 (Reuters) - Leading proxy advisory firm Institutional Shareholder Services (ISS) on Friday recommended "cautionary support" for a planned merger between medical offices operator Healthcare Trust of America Inc and its smaller rival Healthcare Realty Trust Inc

"Cautionary support is therefore warranted," ISS wrote. Its reports often help guide large and small investors on how to vote on mergers or company board appointments. Investors will be able to vote on the deal on July 15.

The two real-estate investment trusts announced plans in February to combine in a cash and stock deal that would create the largest medical landlord in the United States, with some 727 properties in its portfolio.

Investors have questioned the motivation of the deal, with Healthcare Realty Trust shares lagging the sector index since the announcement. Some shareholders have publicly opposed the deal, and Healthcare Realty Trust has been the target of a possible takeover by Welltower Inc, whose bids have been rejected.

But ISS said it appears "that the Healthcare Realty Trust (HR) shareholders' 40% of the combined company is just enough to ensure that, if management can replicate its past achievements, the deal will create more value for them than the status quo standalone plan."

Activist investor Elliott Investment Management had urged Healthcare Trust of America in October to explore a potential sale, saying the company's longstanding underperformance compared to its peers has stoked frustration among shareholders. (Reporting by Svea Herbst-Bayliss; Editing by William Mallard)