In This Article:
-
FFO as Adjusted: $0.45 per share.
-
AFFO: $0.41 per share.
-
Total Portfolio Same-Store Growth: 4.1%.
-
Lab Segment Occupancy: Increased 30 basis points to 95.9%.
-
Lab Segment Cash Rent Mark-to-Market: 10%.
-
Lab Segment Tenant Retention: 83%.
-
Lab Segment Same-Store Growth: 2.8%.
-
Outpatient Medical Cash Rent Mark-to-Market: 10%.
-
Outpatient Medical Tenant Retention: 89%.
-
Outpatient Medical Same-Store Growth: 3.4%.
-
CCRCs Same-Store Growth: 14.2%.
-
Net Debt to EBITDA: 5.1 times.
-
Liquidity: $3 billion with undrawn revolver.
-
Retained Earnings Annually: Approximately $250 million to $300 million.
-
Revised FFO as Adjusted Guidance: $1.79 to $1.81.
-
Revised AFFO Guidance: $1.56 to $1.58.
-
Revised Same-Store Guidance: 3.5% to 4.5%.
-
Merger Synergies: Trending to $50 million in 2024.
Release Date: October 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Healthpeak Properties Inc (NYSE:DOC) increased its guidance for the third time this year, driven by strong performance in leasing, same-store operations, and merger synergies.
-
The company reported significant merger synergies, now tracking to be $50 million, which is 25% above initial forecasts.
-
Leasing momentum is strong, with over 700,000 square feet of leases signed since July 1, including significant activity in high-priority campuses.
-
The outpatient medical business is capturing record re-leasing spreads, with rent escalators moving up to 3% on new leases.
-
Healthpeak Properties Inc (NYSE:DOC) has a strong balance sheet with a net debt to EBITDA of 5.1 times and $3 billion of liquidity, allowing for potential accretive acquisitions.
Negative Points
-
The lab market faces challenges with new supply, which could impact leasing demand despite positive trends in funding and IPOs.
-
Free rent concessions remain a factor, with typical concessions being about a month of free rent for every year of lease term.
-
The company faces potential headwinds from redevelopment needs, with some older buildings requiring significant capital investment.
-
Despite strong performance, the CCRCs segment is not considered strategic to the overall platform, lacking synergies with other business areas.
-
The life science development pipeline is constrained by high construction costs and current cost of capital, limiting new project starts.
Q & A Highlights
Q: Can you quantify the leasing activity at Gateway, Vantage, and Portside, and how should we think about the NOI commencement and existing tenant base? A: Peter Scott, CFO: We signed around 340,000 square feet of new leases, with an existing tenant footprint of about 100,000 square feet, resulting in a net absorption of 240,000 square feet. Of the $60 million NOI upside, we've executed leases for over $30 million. About one-third of this will impact 2025, with the remainder in 2026 and 2027.