Healthpeak Properties Reports Strong Q3 2024 Performance

Healthpeak Properties (NYSE:DOC), Inc. (NYSE: PEAK) announced impressive results for Q3 2024, highlighted by a third increase in guidance, robust leasing activity, and significant synergies from its merger. Senior VP Andrew Johns and President and CEO Scott Brinker detailed the company's financial results and future prospects, focusing on successful leasing and the positive impact of the merger completed on March 1.

The merger is projected to deliver $50 million in year-one synergies, surpassing initial forecasts. Healthpeak's life sciences sector showed notable employment growth and venture capital investment, driving demand for its properties. The company's financial position remains solid, indicated by a net debt-to-EBITDA ratio of 5.1 times and $3 billion in liquidity.

Key Takeaways

• Healthpeak raised its FFO and AFFO guidance by $0.01 each, expecting FFO between $1.79 and $1.81, and AFFO between $1.56 and $1.58.
• Adjusted FFO was $0.45 per share, and AFFO was $0.41 per share, with a same-store NOI growth of 4.1%.
• Lab segment occupancy reached 95.9%, with outpatient medical exhibiting strong leasing rates.
• Over 700,000 square feet of leases were signed since July, with positive cash re-leasing spreads of 10% in Q3.
• The company is pursuing $900 million in development, focusing on outpatient medical projects to maintain a balanced pipeline.

Company Outlook

• Anticipation of low 90% stabilized occupancy within 12-18 months.
• Projected rent mark-to-market for lab space is between 5% and 10%.
• An investor presentation in early November will discuss competitive positioning and growth strategies.

Challenges and Opportunities

Bearish Highlights

• Caution regarding new life science projects due to high construction costs and capital limits.
• Aging properties may need significant investments for redevelopment.

Bullish Highlights

• The merger has yielded unexpected property-level synergies, enhancing profit margins.
• Almost 40% of 2025 lease expirations are under negotiation or in advanced talks.
• A marked improvement and substantial reduction in new supply are expected in the lab market.

Conclusion

Healthpeak Properties demonstrated solid performance in Q3 2024 with improved guidance and a strong financial standing. The firm remains focused on successful leasing, leveraging merger synergies, and strategic planning for future growth, particularly in the thriving life sciences sector.

Full Transcript – Healthpeak Properties Inc (DOC) Q3 2024

Operator: Good morning. Welcome to Healthpeak Properties, Inc.’s Third Quarter Conference Call. All participants will be in listen-only mode. There will be an opportunity to ask questions after today’s presentation.

Andrew Johns: Welcome to Healthpeak’s third quarter 2024 financial results conference call. Today’s conference call contains certain forward-looking statements that are subject to risks and uncertainties.

Scott Brinker: Thanks, Andrew, and welcome. The merger has shown substantial benefits, and our strong leasing momentum propels us forward. Our portfolio continues to produce high earnings growth, supported by increased guidance based on leasing performance and operational excellence.

Peter Scott: Our portfolio demonstrated excellent results, with an adjusted FFO of $0.45 and an AFFO of $0.41, alongside a same-store growth of 4.1% across segments.

This summary includes discussions of leasing dynamics, future developments, and key challenges, illustrating Healthpeak's strong positioning in the market.