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Healthpeak (PEAK) Q2 FFO Meets Estimates, Revenues Miss
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Healthpeak Properties, Inc. reported second-quarter 2020 funds from operations (FFO) as adjusted of 40 cents per share, meeting the Zacks Consensus Estimate. However, the reported figure compared unfavorably with FFO as adjusted of 44 cents per share in the prior-year quarter.
The healthcare real estate investment trust (REIT) generated revenues of $588.4 million, missing the Zacks Consensus Estimate of $687.6 million. Nonetheless, the figure was higher than the year-ago number of 491.6 million.
Results were supported by the decent performance of its life science and medical office segments.
Behind the Headlines
Healthpeak witnessed a 2.2% year-over-year decline in the three-month cash same-store portfolio (SPP) net operating income (NOI). It registered 7.3% growth in life-science cash NOI, a 1.3% rise in the medical office segment, a 2.9% advancement in other non-reportable segments and a 21.2% decline in senior-housing segment cash NOI.
Notable Portfolio Activities in Q2
In June 2020, the company closed the previously-announced sale of three medical office buildings in San Diego, CA, generating proceeds of around $106 million.
In June 2020, it signed a 17-year lease for 74,000 square feet at the Boardwalk development project in San Diego, CA. Notably, the 190,000-square-foot Class A development project is presently 39% pre-leased.
In April 2020, it completed the buyout of the previously-announced life science campus —The Post —for $320 million.
Liquidity
Healthpeak had cash and cash equivalents of $730.9 million as of Jun 30, 2020, up from $144.2 million recorded at the end of 2019.
In June, the company raised $600 million through a senior unsecured notes offering and used proceeds to redeem all of its outstanding $300 million of 3.150% senior unsecured notes and to repurchase $250 million of its 4.250% senior unsecured notes.
Through these refinancing, the company eliminated any scheduled debt maturities till November 2023. After these transactions, it had $2.85 billion of liquidity as of Jul 31, 2020. This consisted of full availability on its $2.5-billion revolving credit facility, and nearly $350 million of cash and cash equivalents.
Dividend Update
On Aug 4, the company announced a quarterly cash dividend of 37 cents per common share. The dividend will be paid out on Aug 25 to shareholders of record as of Aug 14, 2020.
July 2020 Preliminary Updates
At its life science segment, occupancy for July was 96.3%, down 60 basis points (bps) since Jun 30. July rent payments improved from June collections, with the company receiving 99% of rents for the month. In June, it finalized short-term deferrals of around $1 million.
At its medical office segment, occupancy for July was 91.1%, stable as compared with Jun 30. The company collected 98% of contractual rents for July. It has deferred $6 million of rents.
In its senior housing operating portfolio, the company continued to witness a decline in move-ins, move-outs, leads and tours. This has likely resulted in spot occupancy declining 110 bps from June to July’s 77.8%.
At its senior housing CCRC portfolio, spot occupancy as of Jul 31 was 79.3%, decreasing 20 bps from June. Further, at its triple-net lease portfolio, the company received 97% of rents and has deferred 3%.
Healthpeak Properties, Inc. Price, Consensus and EPS Surprise
American Tower Corporation (AMT - Free Report) reported second-quarter 2020 FFO per share of $2.07, beating the Zacks Consensus Estimate of $2.05. Further, the reported figure improved 1.5% year over year.
Host Hotels & Resorts, Inc. (HST - Free Report) reported second-quarter 2020 loss in terms of adjusted FFO per share of 26 cents, meeting the Zacks Consensus Estimate. Notably, the company reported adjusted FFO per share of 53 cents in the prior-year quarter.
SL Green Realty Corp. (SLG - Free Report) reported second-quarter 2020 FFO per share of $1.70, surpassing the Zacks Consensus Estimate of $1.55. The figure, however, compares unfavorably with the year-ago quarter’s $1.82.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Healthpeak (PEAK) Q2 FFO Meets Estimates, Revenues Miss
Healthpeak Properties, Inc. reported second-quarter 2020 funds from operations (FFO) as adjusted of 40 cents per share, meeting the Zacks Consensus Estimate. However, the reported figure compared unfavorably with FFO as adjusted of 44 cents per share in the prior-year quarter.
The healthcare real estate investment trust (REIT) generated revenues of $588.4 million, missing the Zacks Consensus Estimate of $687.6 million. Nonetheless, the figure was higher than the year-ago number of 491.6 million.
Results were supported by the decent performance of its life science and medical office segments.
Behind the Headlines
Healthpeak witnessed a 2.2% year-over-year decline in the three-month cash same-store portfolio (SPP) net operating income (NOI). It registered 7.3% growth in life-science cash NOI, a 1.3% rise in the medical office segment, a 2.9% advancement in other non-reportable segments and a 21.2% decline in senior-housing segment cash NOI.
Notable Portfolio Activities in Q2
In June 2020, the company closed the previously-announced sale of three medical office buildings in San Diego, CA, generating proceeds of around $106 million.
In June 2020, it signed a 17-year lease for 74,000 square feet at the Boardwalk development project in San Diego, CA. Notably, the 190,000-square-foot Class A development project is presently 39% pre-leased.
In April 2020, it completed the buyout of the previously-announced life science campus —The Post —for $320 million.
Liquidity
Healthpeak had cash and cash equivalents of $730.9 million as of Jun 30, 2020, up from $144.2 million recorded at the end of 2019.
In June, the company raised $600 million through a senior unsecured notes offering and used proceeds to redeem all of its outstanding $300 million of 3.150% senior unsecured notes and to repurchase $250 million of its 4.250% senior unsecured notes.
Through these refinancing, the company eliminated any scheduled debt maturities till November 2023. After these transactions, it had $2.85 billion of liquidity as of Jul 31, 2020. This consisted of full availability on its $2.5-billion revolving credit facility, and nearly $350 million of cash and cash equivalents.
Dividend Update
On Aug 4, the company announced a quarterly cash dividend of 37 cents per common share. The dividend will be paid out on Aug 25 to shareholders of record as of Aug 14, 2020.
July 2020 Preliminary Updates
At its life science segment, occupancy for July was 96.3%, down 60 basis points (bps) since Jun 30. July rent payments improved from June collections, with the company receiving 99% of rents for the month. In June, it finalized short-term deferrals of around $1 million.
At its medical office segment, occupancy for July was 91.1%, stable as compared with Jun 30. The company collected 98% of contractual rents for July. It has deferred $6 million of rents.
In its senior housing operating portfolio, the company continued to witness a decline in move-ins, move-outs, leads and tours. This has likely resulted in spot occupancy declining 110 bps from June to July’s 77.8%.
At its senior housing CCRC portfolio, spot occupancy as of Jul 31 was 79.3%, decreasing 20 bps from June. Further, at its triple-net lease portfolio, the company received 97% of rents and has deferred 3%.
Healthpeak Properties, Inc. Price, Consensus and EPS Surprise
Healthpeak Properties, Inc. price-consensus-eps-surprise-chart | Healthpeak Properties, Inc. Quote
Healthpeak currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other REITs
American Tower Corporation (AMT - Free Report) reported second-quarter 2020 FFO per share of $2.07, beating the Zacks Consensus Estimate of $2.05. Further, the reported figure improved 1.5% year over year.
Host Hotels & Resorts, Inc. (HST - Free Report) reported second-quarter 2020 loss in terms of adjusted FFO per share of 26 cents, meeting the Zacks Consensus Estimate. Notably, the company reported adjusted FFO per share of 53 cents in the prior-year quarter.
SL Green Realty Corp. (SLG - Free Report) reported second-quarter 2020 FFO per share of $1.70, surpassing the Zacks Consensus Estimate of $1.55. The figure, however, compares unfavorably with the year-ago quarter’s $1.82.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>