PR Newswire
IRVINE, Calif., Oct. 30, 2019
IRVINE, Calif., Oct. 30, 2019 /PRNewswire/ -- Healthpeak Properties, Inc., formerly known as HCP, Inc. (NYSE: HCP, to become "PEAK" effective November 5, 2019), today announced results for the third quarter ended September 30, 2019. For the quarter, Healthpeak generated a net loss of $0.09 per share, NAREIT FFO of $0.37 per share, FFO as adjusted of $0.44 per share and blended Total Portfolio SPP Cash NOI growth of 2.4%.
THIRD QUARTER 2019 FINANCIAL PERFORMANCE AND RECENT HIGHLIGHTS
– Changed name from HCP, Inc. to Healthpeak Properties, Inc. and website URL to www.healthpeak.com effective October 30, 2019, with name change and ticker symbol change to "PEAK" to become effective on the New York Stock Exchange on November 5, 2019
– Promoted Scott Brinker to President and Chief Investment Officer, Jeff Miller to Executive Vice President - Senior Housing and Lisa Alonso to Executive Vice President and Chief Human Resources Officer, effective January 1, 2020
– Entered into an agreement to form a $790 million joint venture in which Healthpeak will sell a 46.5% interest in a 19-property senior housing operating portfolio managed by Brookdale Senior Living ("Brookdale") to a sovereign wealth fund
– Signed mutually beneficial agreements with Brookdale related to the CCRC joint venture and the triple-net portfolio. Healthpeak will acquire Brookdale's 51% interest in 13 of 15 CCRC campuses for $541 million (increased from previously reported 12 campuses for $510 million). The remaining two campuses will be jointly marketed for sale by Healthpeak and Brookdale
– Entered into an agreement to sell remaining 49% interest in Healthpeak's U.K. holdings for gross proceeds of $232 million (or approximately $90 million of net proceeds after debt repayment)
– Signed agreement for early termination of a nine-property master lease with Capital Senior Living originally scheduled to mature in October 2020; Healthpeak intends to convert four core properties to RIDEA structures with Atria Senior Living (3) and Discovery Senior Living (1) and sell five non-core properties to third parties over the next 6-12 months
– Added two new medical office developments with total estimated spend of $34 million to Healthpeak's HCA Healthcare ("HCA") development program
– Previously announced transactions:
– Established a $1 billion unsecured commercial paper program
– Received credit rating upgrade from Fitch Ratings to BBB+ with a stable outlook
– Increased 2019 FFO as adjusted per share guidance by one cent at the midpoint and 2019 Blended Total Portfolio SPP Cash NOI guidance by 25 basis points at the midpoint
– Named to the Dow Jones Sustainability Index for the seventh year, received the Green Star designation from GRESB for the eighth year and won the Ethical Boardroom's Corporate Governance Award for North American REITs
THIRD QUARTER COMPARISON
| Three Months Ended | | Three Months Ended | | ||||||||||||
(in thousands, except per share amounts) | Amount | | Per Share | | Amount | | Per Share | | ||||||||
Net income (loss), diluted | $ | (46,249) | | | $ | (0.09) | | | $ | 98,946 | | | $ | 0.21 | | |
NAREIT FFO, diluted | 183,266 | | | 0.37 | | | 155,632 | | | 0.33 | | | ||||
FFO as adjusted, diluted | 222,160 | | | 0.44 | | | 208,106 | | | 0.44 | | | ||||
FAD, diluted | 191,922 | | | | | 186,545 | | | | |
NAREIT FFO, FFO as adjusted, FAD, and SPP Cash NOI are supplemental non-GAAP financial measures that we believe are useful in evaluating the operating performance of real estate investment trusts (see the "Funds From Operations" and "Funds Available for Distribution" sections of this release for additional information). See "September 30, 2019 Discussion and Reconciliation of Non-GAAP Financial Measures" for definitions, discussions of their uses and inherent limitations, and reconciliations to the most directly comparable financial measures calculated and presented in accordance with GAAP on the Investor Relations section of our website at http://ir.healthpeak.com/quarterly-results.
SAME PROPERTY PORTFOLIO OPERATING SUMMARY
The table below outlines the year-over-year three month and nine month SPP Cash NOI growth:
Year-Over-Year Total SPP Cash NOI Growth | | |||
| % of Total YTD SPP | Three Month | Nine Month | |
Senior housing | 26.2% | (1.3)% | (0.5%) | |
Life science | 28.0% | 5.8% | 6.3% | |
Medical office | 39.4% | 2.5% | 3.3% | |
Other non-reportable segments ("Other") | 6.4% | 2.9% | 2.6% | |
Total Portfolio | 100.0% | 2.4% | 3.1% | |
HCP CHANGES NAME TO HEALTHPEAK PROPERTIES, INC. AND TICKER SYMBOL TO "PEAK"
On October 30, 2019, we announced our new corporate name, Healthpeak Properties, Inc., and new common stock ticker symbol, "PEAK". Healthpeak's common stock will begin trading under its new name and ticker symbol "PEAK" on the New York Stock Exchange on November 5, 2019.
The name change represents the culmination of efforts to reposition our strategy, team, portfolio and balance sheet.
Healthpeak's new website can be found at www.healthpeak.com.
EXECUTIVE LEADERSHIP PROMOTIONS
On October 30, 2019, the Company announced several leadership changes, effective January 1, 2020.
A copy of the corresponding press release with additional details is available on the Investor Relations section of our website at http://ir.healthpeak.com.
SENIOR HOUSING JOINT VENTURE TRANSACTION
In October 2019, Healthpeak entered into a definitive agreement with a sovereign wealth fund (the "JV Partner") to form a new $790 million 53.5% (Healthpeak) / 46.5% (JV Partner) joint venture (the "Senior Housing Joint Venture"). The transaction is expected to close by year end.
Healthpeak will contribute 19 senior housing operating properties managed by Brookdale to the Senior Housing Joint Venture. The properties consist of 3,366 units and are located in Texas, Colorado, Illinois, Tennessee and Maryland with an average age of 23 years.
The Senior Housing Joint Venture, combined with the previously announced Brookdale CCRC and triple-net transactions, is expected to reduce Healthpeak's Brookdale concentration to 6% on a pro forma basis.
BROOKDALE CCRC AND TRIPLE-NET TRANSACTIONS
On October 1, 2019, Healthpeak announced several transactions with Brookdale related to the 15-property CCRC joint venture and the 43-property triple-net portfolio that will improve Healthpeak's operator diversification, strengthen the remaining Brookdale-operated triple-net portfolio, expand Healthpeak's relationship with Life Care Services ("LCS") and provide Healthpeak full ownership and control over this unique and differentiated CCRC portfolio.
Subsequently, in October 2019, Healthpeak and Brookdale agreed to revise the terms of the previously announced transaction to include the purchase by Healthpeak of Brookdale's interest in the 741-unit CCRC in Bradenton, Florida rather than selling the property to a third party. The transaction highlights below reflect the addition of the Bradenton CCRC to the Healthpeak acquisition pool.
Additional details can be found in the October 1, 2019 press release and the "Healthpeak Brookdale Transaction Update – October 30, 2019" investor presentation on the Investor Relations section of our website at http://ir.healthpeak.com.
U.K. PORTFOLIO SALE
In October 2019, Healthpeak entered into a definitive agreement to sell the remaining 49% interest in its U.K. holdings to Omega Healthcare Investors, Inc. for net proceeds after debt repayment of approximately $90 million. The transaction is expected to close by year end and will allow Healthpeak to complete its planned exit from the U.K.
CAPITAL SENIOR LIVING ("CSU")
In October 2019, Healthpeak entered into an agreement for the early termination of a nine-property master lease with CSU, originally scheduled to mature in October 2020. Healthpeak will convert four core properties from triple-net leases to RIDEA structures. Management of three of the core properties will be transitioned to Atria Senior Living and one core property will be transitioned to Discovery Senior Living. Closing is expected to occur in the first quarter of 2020. Healthpeak intends to sell the remaining five non-core properties to third parties over the next 6-12 months. The leases will be terminated with respect to the properties upon closing of the transitions and sales, respectively. CSU will continue to pay its contractual rent obligations until the property sales and transitions are completed. Additionally, CSU will pay Healthpeak $1 million upon completion of these transactions. Healthpeak's other six-property master lease with CSU, which includes $4.3 million in annual rent and matures in 2026, will remain unaffected.
DEVELOPMENT UPDATES
MEDICAL OFFICE DEVELOPMENT PROGRAM WITH HCA
As part of the development program with HCA, Healthpeak has signed definitive agreements on two additional development projects.
Construction on these development projects is expected to begin in 2020.
PREVIOUSLY ANNOUNCED TRANSACTION UPDATES
35 CAMBRIDGEPARK DRIVE
In September 2019, Healthpeak announced it executed a definitive agreement to acquire, for $332.5 million, a 224,000 square foot, LEED Gold® laboratory building located at 35 CambridgePark Drive in the Cambridge submarket of Boston, Massachusetts, which represents year one cash and GAAP capitalization rates of 4.8% and 5.7%, respectively. The newly built and 100% leased property is adjacent to Healthpeak's recently acquired property at 87 CambridgePark Drive and future development opportunity at 101 CambridgePark Drive. Combined, Healthpeak has created up to 440,000 square feet of contiguous space across a modern campus. The transaction is expected to close in December 2019.
BALANCE SHEET AND CAPITAL MARKET ACTIVITIES
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