Healthpeak Properties Reports First Quarter 2024 Results and Declares Quarterly Cash Dividend on Common Stock
FIRST QUARTER 2024 FINANCIAL PERFORMANCE AND RECENT HIGHLIGHTS
– Net income of
– First quarter new and renewal lease executions totaled 1.6 million square feet:
- Outpatient Medical new and renewal lease executions totaled 1.4 million square feet
- Lab new and renewal lease executions totaled 155,000 square feet
- Signed letters of intent on an additional 455,000 square feet of lab leases
– Increased full year 2024 diluted earnings guidance to a range of
-
Year one merger-related synergy forecast increased by
$5 million to$45 million
-
Repurchased
$100 million of common stock at an average price of$17.11 per share
– Year-to-date, completed property management internalization in 10 markets covering 17 million square feet
– Year-to-date dispositions and seller financing repayments total
– As previously announced, entered into a new
– Net Debt to Adjusted EBITDAre was 5.2x for the quarter ended
– Recent sustainability and corporate impact achievements include:
-
Earned the 2024 ENERGY STAR® Partner of the Year Award for Sustained Excellence from the
U.S. Environmental Protection Agency and theU.S. Department of Energy , marking Healthpeak's fourth time being named Partner of the Year and first time being recognized for Sustained Excellence
-
Named a 2024 Green Lease Leader (Gold) by the
Institute for Market Transformation for the first time
- Reaffirmed our commitment to advance intentional equity, diversity, and inclusion efforts by renewing our CEO Action for Diversity & Inclusion™ pledge
To learn more about Healthpeak's commitment to responsible business, please visit www.healthpeak.com/ESG.
FIRST QUARTER COMPARISON
|
Three Months Ended
|
|
Three Months Ended
|
||||||||
(in thousands, except per share amounts) |
Amount |
|
Per Share |
|
Amount |
|
Per Share |
||||
Net income, diluted |
$ |
6,477 |
|
$ |
0.01 |
|
$ |
117,698 |
|
$ |
0.22 |
Nareit FFO, diluted |
|
162,206 |
|
|
0.27 |
|
|
230,443 |
|
|
0.42 |
FFO as Adjusted, diluted |
|
277,480 |
|
|
0.45 |
|
|
231,881 |
|
|
0.42 |
AFFO, diluted |
|
247,757 |
|
|
0.41 |
|
|
209,299 |
|
|
0.38 |
Nareit FFO, FFO as Adjusted, AFFO, Total Merger-Combined Same-Store Cash (Adjusted) NOI, and Net Debt to Adjusted EBITDAre are supplemental non-GAAP financial measures that we believe are useful in evaluating the operating performance and financial position of real estate investment trusts (see the "Funds From Operations" and "Adjusted Funds From Operations" sections of this release for additional information). See "
MERGER-COMBINED SAME-STORE ("SS") OPERATING SUMMARY
Year-Over-Year Total Merger-Combined SS Cash (Adjusted) NOI Growth |
||
|
Three Month |
|
|
SS Growth % |
% of SS |
Outpatient Medical |
2.6% |
56.3% |
Lab |
2.7% |
34.4% |
CCRC |
26.6% |
9.3% |
Total Merger-Combined SS Cash (Adjusted) NOI |
4.5% |
100.0% |
PHYSICIANS REALTY TRUST MERGER INTEGRATION
As previously disclosed, on
To date, the company has completed internalization of property management in 10 markets covering 17 million square feet. Healthpeak now forecasts year one merger-related synergies of
REDEVELOPMENT UPDATE
PORTSIDE AT OYSTER POINT
During the first quarter, Healthpeak placed approximately 325,000 square feet across three buildings at its Portside at
Elements of the redevelopment include the addition of a fitness center, boardroom, and outdoor meeting and gathering spaces complemented by updated landscaping throughout the campus. Additionally, the redevelopment will improve connectivity between Healthpeak's Cove and Portside campuses, creating an approximately 2 million square foot amenity-rich contiguous campus at the entrance to
The enhanced amenity offering, improved connectivity, and significantly lower tenant operating costs relative to new construction, provide Healthpeak a competitive leasing advantage. To date, Healthpeak has re-leased approximately 175,000 square feet across the 465,000 square foot in active redevelopment on the Portside campus with initial occupancy expected to commence in mid-2024.
DISPOSITIONS AND LOAN REPAYMENTS
-
Callan Ridge Joint Venture: As previously announced, in
January 2024 , Healthpeak sold a 65% interest in the fully leasedCallan Ridge lab campus in theTorrey Pines submarket ofSan Diego . The formation of the joint venture valuedCallan Ridge at$236 million , or$1,275 per square foot, and represents a stabilized cash capitalization rate of 5.3% based on the initial annual rental rate of approximately$67 per square foot. At closing, net proceeds to Healthpeak were$128 million . Additionally, the formation of the joint venture reduces Healthpeak's future tenant improvement funding by approximately$20 million .
-
Outpatient Medical Dispositions: In
March 2024 , Healthpeak sold two outpatient medical buildings for$29 million .
-
Poway R&D Portfolio: In
April 2024 , Healthpeak sold a portfolio of seven buildings in thePoway submarket ofSan Diego for$180 million . The portfolio comprises R&D, industrial, and office spaces across 702,000 square feet and is fully-leased to an affiliate ofGeneral Atomics . The trailing cash capitalization rate on the disposition was 6.0%.
-
Loan Repayments: During the first quarter, we received
$69 million of seller financing loan repayments.
SHARE REPURCHASE ACTIVITY
In
CAPITAL MARKETS
As previously announced, Healthpeak entered into a new
As of
BOARD OF DIRECTORS
On
DIVIDEND
On
2024 GUIDANCE
We are updating the following guidance ranges for full year 2024:
-
Diluted earnings per common share from
$0.07 –$0.13 to$0.16 –$0.20
-
Diluted Nareit FFO per share from
$1.54 –$1.60 to$1.56 –$1.60
-
Diluted FFO as Adjusted per share from
$1.73 –$1.79 to$1.76 –$1.80
-
Diluted AFFO per share from
$1.50 –$1.56 to$1.53 –$1.57
- Total Merger-Combined Same-Store Cash (Adjusted) NOI growth from 2.25% – 3.75% to 2.50% – 4.00%
These estimates are based on our view of existing market conditions, transaction timing, and other assumptions for the year ending
CONFERENCE CALL INFORMATION
Healthpeak has scheduled a conference call and webcast for
The conference call can be accessed in the following ways:
- Healthpeak’s website: https://ir.healthpeak.com/news-events
- Webcast: https://events.q4inc.com/attendee/344417431. Joining via webcast is recommended for those who will not be asking questions.
- Telephone: The participant dial-in number is (800) 715-9871.
An archive of the webcast will be available on Healthpeak’s website through
ABOUT HEALTHPEAK
FORWARD-LOOKING STATEMENTS
Statements contained in this release that are not historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among other things, statements regarding our and our officers' intent, belief or expectation as identified by the use of words such as "may," "will," "project," "expect," "believe," "intend," "anticipate," "seek," "target," "forecast," "plan," "potential," "estimate," "could," "would," "should" and other comparable and derivative terms or the negatives thereof. Examples of forward-looking statements include, among other things: (i) statements regarding timing, outcomes and other details relating to current, pending or contemplated acquisitions, dispositions, transitions, developments, redevelopments, joint venture transactions, leasing activity and commitments, financing activities, or other transactions discussed in this release, including statements regarding our anticipated synergies from our merger with
Moreover, other risks and uncertainties of which we are not currently aware may also affect our forward-looking statements, and may cause actual results and the timing of events to differ materially from those anticipated. The forward-looking statements made in this communication are made only as of the date hereof or as of the dates indicated in the forward-looking statements, even if they are subsequently made available by us on our website or otherwise. We do not undertake any obligation to update or supplement any forward-looking statements to reflect actual results, new information, future events, changes in its expectations or other circumstances that exist after the date as of which the forward-looking statements were made.
Consolidated Balance Sheets In thousands, except share and per share data |
|||||||
|
|
|
|
||||
Assets |
|
|
|
||||
Real estate: |
|
|
|
||||
Buildings and improvements |
$ |
16,571,761 |
|
|
$ |
13,329,464 |
|
Development costs and construction in progress |
|
735,176 |
|
|
|
643,217 |
|
Land and improvements |
|
3,079,225 |
|
|
|
2,647,633 |
|
Accumulated depreciation and amortization |
|
(3,723,173 |
) |
|
|
(3,591,951 |
) |
Net real estate |
|
16,662,989 |
|
|
|
13,028,363 |
|
Loans receivable, net of reserves of |
|
267,798 |
|
|
|
218,450 |
|
Investments in and advances to unconsolidated joint ventures |
|
930,559 |
|
|
|
782,853 |
|
Accounts receivable, net of allowance of |
|
68,567 |
|
|
|
55,820 |
|
Cash and cash equivalents |
|
101,763 |
|
|
|
117,635 |
|
Restricted cash |
|
55,395 |
|
|
|
51,388 |
|
Intangible assets, net |
|
1,160,446 |
|
|
|
314,156 |
|
Assets held for sale, net |
|
— |
|
|
|
117,986 |
|
Right-of-use asset, net |
|
434,010 |
|
|
|
240,155 |
|
Other assets, net |
|
860,513 |
|
|
|
772,044 |
|
Total assets |
$ |
20,542,040 |
|
|
$ |
15,698,850 |
|
|
|
|
|
||||
Liabilities and Equity |
|
|
|
||||
Bank line of credit and commercial paper |
$ |
183,000 |
|
|
$ |
720,000 |
|
Term loans |
|
1,645,180 |
|
|
|
496,824 |
|
Senior unsecured notes |
|
6,545,209 |
|
|
|
5,403,378 |
|
Mortgage debt |
|
382,406 |
|
|
|
256,097 |
|
Intangible liabilities, net |
|
238,760 |
|
|
|
127,380 |
|
Liabilities related to assets held for sale, net |
|
— |
|
|
|
729 |
|
Lease liability |
|
307,119 |
|
|
|
206,743 |
|
Accounts payable, accrued liabilities, and other liabilities |
|
717,191 |
|
|
|
657,196 |
|
Deferred revenue |
|
923,676 |
|
|
|
905,633 |
|
Total liabilities |
|
10,942,541 |
|
|
|
8,773,980 |
|
|
|
|
|
||||
Commitments and contingencies |
|
|
|
||||
|
|
|
|
||||
Redeemable noncontrolling interests |
|
54,848 |
|
|
|
48,828 |
|
|
|
|
|
||||
Common stock, |
|
703,733 |
|
|
|
547,156 |
|
Additional paid-in capital |
|
12,918,936 |
|
|
|
10,405,780 |
|
Cumulative dividends in excess of earnings |
|
(4,779,599 |
) |
|
|
(4,621,861 |
) |
Accumulated other comprehensive income (loss) |
|
38,543 |
|
|
|
19,371 |
|
Total stockholders’ equity |
|
8,881,613 |
|
|
|
6,350,446 |
|
|
|
|
|
||||
Joint venture partners |
|
328,430 |
|
|
|
310,998 |
|
Non-managing member unitholders |
|
334,608 |
|
|
|
214,598 |
|
Total noncontrolling interests |
|
663,038 |
|
|
|
525,596 |
|
|
|
|
|
||||
Total equity |
|
9,544,651 |
|
|
|
6,876,042 |
|
|
|
|
|
||||
Total liabilities and equity |
$ |
20,542,040 |
|
|
$ |
15,698,850 |
|
Consolidated Statements of Operations In thousands, except per share data |
|||||||
|
Three Months Ended
|
||||||
|
|
2024 |
|
|
|
2023 |
|
Revenues: |
|
||||||
Rental and related revenues |
$ |
462,033 |
|
|
$ |
392,431 |
|
Resident fees and services |
|
138,776 |
|
|
|
127,084 |
|
Interest income and other |
|
5,751 |
|
|
|
6,163 |
|
Total revenues |
|
606,560 |
|
|
|
525,678 |
|
|
|
|
|
||||
Costs and expenses: |
|
|
|
||||
Interest expense |
|
60,907 |
|
|
|
47,963 |
|
Depreciation and amortization |
|
219,219 |
|
|
|
179,225 |
|
Operating |
|
243,729 |
|
|
|
223,088 |
|
General and administrative |
|
23,299 |
|
|
|
24,547 |
|
Transaction and merger-related costs |
|
107,220 |
|
|
|
2,425 |
|
Impairments and loan loss reserves (recoveries), net |
|
11,458 |
|
|
|
(2,213 |
) |
Total costs and expenses |
|
665,832 |
|
|
|
475,035 |
|
Other income (expense): |
|
|
|
||||
Gain (loss) on sales of real estate, net |
|
3,255 |
|
|
|
81,578 |
|
Other income (expense), net |
|
78,516 |
|
|
|
772 |
|
Total other income (expense), net |
|
81,771 |
|
|
|
82,350 |
|
|
|
|
|
||||
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures |
|
22,499 |
|
|
|
132,993 |
|
Income tax benefit (expense) |
|
(13,698 |
) |
|
|
(302 |
) |
Equity income (loss) from unconsolidated joint ventures |
|
2,376 |
|
|
|
1,816 |
|
Net income (loss) |
|
11,177 |
|
|
|
134,507 |
|
Noncontrolling interests’ share in earnings |
|
(4,501 |
) |
|
|
(15,555 |
) |
Net income (loss) attributable to |
|
6,676 |
|
|
|
118,952 |
|
Participating securities’ share in earnings |
|
(199 |
) |
|
|
(1,254 |
) |
Net income (loss) applicable to common shares |
$ |
6,477 |
|
|
$ |
117,698 |
|
|
|
|
|
||||
Earnings (loss) per common share: |
|
|
|
||||
Basic |
$ |
0.01 |
|
|
$ |
0.22 |
|
Diluted |
$ |
0.01 |
|
|
$ |
0.22 |
|
Weighted average shares outstanding: |
|
|
|
||||
Basic |
|
600,898 |
|
|
|
546,842 |
|
Diluted |
|
601,188 |
|
|
|
547,110 |
|
Funds From Operations In thousands, except per share data |
|||||||
|
Three Months Ended
|
||||||
|
|
2024 |
|
|
|
2023 |
|
Net income (loss) applicable to common shares |
$ |
6,477 |
|
|
$ |
117,698 |
|
Real estate related depreciation and amortization |
|
219,219 |
|
|
|
179,225 |
|
Healthpeak’s share of real estate related depreciation and amortization from unconsolidated joint ventures |
|
8,772 |
|
|
|
5,993 |
|
Noncontrolling interests’ share of real estate related depreciation and amortization |
|
(4,452 |
) |
|
|
(4,783 |
) |
Loss (gain) on sales of depreciable real estate, net |
|
(3,255 |
) |
|
|
(81,578 |
) |
Noncontrolling interests’ share of gain (loss) on sales of depreciable real estate, net |
|
— |
|
|
|
11,546 |
|
Loss (gain) upon change of control, net(1) |
|
(77,781 |
) |
|
|
— |
|
Taxes associated with real estate dispositions(2) |
|
11,608 |
|
|
|
— |
|
Nareit FFO applicable to common shares |
|
160,588 |
|
|
|
228,101 |
|
Distributions on dilutive convertible units and other |
|
1,618 |
|
|
|
2,342 |
|
Diluted Nareit FFO applicable to common shares |
$ |
162,206 |
|
|
$ |
230,443 |
|
Diluted Nareit FFO per common share |
$ |
0.27 |
|
|
$ |
0.42 |
|
Weighted average shares outstanding - Diluted Nareit FFO |
|
608,807 |
|
|
|
554,400 |
|
Impact of adjustments to Nareit FFO: |
|
|
|
||||
Transaction and merger-related items(3) |
$ |
102,829 |
|
|
$ |
2,364 |
|
Other impairments (recoveries) and other losses (gains), net(4) |
|
11,853 |
|
|
|
(1,272 |
) |
Casualty-related charges (recoveries), net(5) |
|
— |
|
|
|
348 |
|
Total adjustments |
|
114,682 |
|
|
|
1,440 |
|
FFO as Adjusted applicable to common shares |
|
275,270 |
|
|
|
229,541 |
|
Distributions on dilutive convertible units and other |
|
2,210 |
|
|
|
2,340 |
|
Diluted FFO as Adjusted applicable to common shares |
$ |
277,480 |
|
|
$ |
231,881 |
|
Diluted FFO as Adjusted per common share |
$ |
0.45 |
|
|
$ |
0.42 |
|
Weighted average shares outstanding - Diluted FFO as Adjusted |
|
610,632 |
|
|
|
554,400 |
|
__________________________________________ | |
(1) |
The three months ended |
(2) |
The three months ended |
(3) |
The three months ended |
(4) |
The three months ended |
(5) |
Casualty-related charges (recoveries), net are recognized in other income (expense), net and equity income (loss) from unconsolidated joint ventures in the Consolidated Statements of Operations. |
Adjusted Funds From Operations In thousands |
|||||||
|
Three Months Ended
|
||||||
|
|
2024 |
|
|
|
2023 |
|
FFO as Adjusted applicable to common shares |
$ |
275,270 |
|
|
$ |
229,541 |
|
Stock-based compensation amortization expense |
|
3,366 |
|
|
|
3,287 |
|
Amortization of deferred financing costs and debt discounts (premiums) |
|
4,522 |
|
|
|
2,821 |
|
Straight-line rents(1) |
|
(12,093 |
) |
|
|
(747 |
) |
AFFO capital expenditures |
|
(17,517 |
) |
|
|
(22,789 |
) |
Deferred income taxes |
|
724 |
|
|
|
(261 |
) |
Amortization of above (below) market lease intangibles, net |
|
(7,351 |
) |
|
|
(5,803 |
) |
Other AFFO adjustments |
|
(1,485 |
) |
|
|
1,610 |
|
AFFO applicable to common shares |
|
245,436 |
|
|
|
207,659 |
|
Distributions on dilutive convertible units and other |
|
2,321 |
|
|
|
1,640 |
|
Diluted AFFO applicable to common shares |
$ |
247,757 |
|
|
$ |
209,299 |
|
Diluted AFFO per common share |
$ |
0.41 |
|
|
$ |
0.38 |
|
Weighted average shares outstanding - Diluted AFFO |
|
610,632 |
|
|
|
552,575 |
|
__________________________________________ | |
(1) |
The three months ended |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240425517824/en/
Senior Vice President – Investor Relations
720-428-5400
Source: