IRVINE, Calif., Feb. 11, 2020 /PRNewswire/ -- Healthpeak
Properties, Inc. (NYSE: PEAK) today announced results for the
fourth quarter and full year ended December 31, 2019.
FOURTH QUARTER 2019 FINANCIAL PERFORMANCE AND RECENT
HIGHLIGHTS
– Net income of $0.09 per share, NAREIT FFO of $0.39 per share, FFO as Adjusted of $0.44 per share and blended Total Portfolio SPP
Cash NOI growth of 3.6%
– Executed a definitive agreement to
acquire The Post, a 426,000 square foot life science property
located within the Route 128 submarket of Boston, Massachusetts, for $320 million
– Signed leases totaling 122,000 square
feet at Healthpeak's 75 Hayden development project in Boston, Massachusetts
– Executed an agreement with Capital
Senior Living ("CSU") to convert the six properties in the master
lease maturing 2026 into a RIDEA structure and immediately market
those properties for sale
– Previously announced Life Science
transactions:
- In December 2019, closed on the
$333 million acquisition of 35
CambridgePark Drive in the West Cambridge Boston submarket
- Commenced construction on a $164
million life science development project, The Boardwalk,
located in the Torrey Pines life
science cluster in San Diego
- Executed a long-term lease with Janssen BioPharma, Inc., part
of the Johnson & Johnson Family of Companies, for approximately
60% of Phase II of The Shore at Sierra Point
- Executed a lease amendment and extension with Amgen at
Healthpeak's Britannia Oyster Point campus in South San Francisco
– Previously announced Senior Housing
transactions:
- Entered into an agreement with Oakmont Senior Living
("Oakmont") that provides Healthpeak the option to acquire up to 24
of Oakmont's senior housing development properties as completed and
stabilized over the next four years
- In January 2020, closed on the
transactions with Brookdale Senior Living ("Brookdale") related to the acquisition of
Brookdale's 51% interest in 13
CCRCs for $641 million (which
includes payment of a $100 million
management termination fee) and the sale of the 18-property
triple-net portfolio for $405
million
- In December 2019, closed on a
$790 million sovereign wealth fund
senior housing joint venture ("SWF SH JV") in which Healthpeak sold
a 46.5% interest in a 19-property senior housing operating
portfolio managed by Brookdale to
a sovereign wealth fund
- In December 2019, closed on the
sale of the remaining 49% interest in Healthpeak's U.K. holdings,
which resulted in $91 million of net
proceeds
– Previously announced Medical Office
transactions:
- Added an on-campus medical office development in Nashville with a total estimated spend of
$49 million to Healthpeak's
development program with HCA Healthcare ("HCA")
– Issued $750
million of 3.00% senior unsecured notes due 2030 and prepaid
Healthpeak's $350 million 4.00%
senior unsecured notes due 2022
– Completed public offering of 15.6
million shares of common stock for gross proceeds of $547 million and sold 7.5 million shares of
common stock under the ATM equity program, raising gross proceeds
of $250 million
– Appointed Sara Grootwassink Lewis as
an independent director to Healthpeak's Board of Directors
– Welcomed Justin Hill to our team to
lead Medical Office business development
– Named to the CDP Leadership Band with
a score of A-, as well as the Dow Jones Sustainability Index for
the seventh consecutive year; received NAREIT's Dividends Through
Diversity Award; received the Green Star designation from GRESB for
the eighth year, and named to Bloomberg Gender-Equality Index,
Investors' Business Daily's Top 50 ESG Companies list and
Newsweek's list of America's Most Responsible Companies
– Completed a comprehensive review of,
and certain revisions to, Healthpeak's Senior Housing Operating
Portfolio Same-Store policies. SHOP same-store policy details,
rationale and pro forma impact can be found on the "Investor
Presentations" section of our website at
https://ir.healthpeak.com/investor-presentations
FULL YEAR 2019 HIGHLIGHTS
– Net income of $0.09 per share, NAREIT FFO of $1.59 per share, FFO as Adjusted of $1.76 per share and blended Total Portfolio SPP
Cash NOI growth of 3.7%
– Changed name to Healthpeak
Properties, Inc., ticker symbol to "PEAK" and website URL to
www.healthpeak.com
– Announced $2.7
billion of investments including:
- $1.4 billion of senior housing
acquisitions
- $1.1 billion of life science
acquisitions and estimated incremental development spending at The
Boardwalk
- $166 million of estimated
incremental medical office development spending through
Healthpeak's program with HCA
– Announced $1.4
billion of senior housing dispositions, including the
$274 million sale of Healthpeak's
direct financing lease interests in 13 non-core senior housing
properties to Prime Care, LLC and its affiliates
– Improved operator diversification and
the quality of Healthpeak's senior housing portfolio
- Converted 39 triple-net leased assets to RIDEA (35 Sunrise, 4
Oakmont)
- Renewed master lease with Aegis Senior Living and amended the
lease with Harbor Retirement Associates
- Reduced Brookdale
concentration to 6%
– Continued to deliver development
projects on-time and on-budget, with significant pre-leasing prior
to delivery
- Delivered Phase III of The Cove in South San Francisco, representing 324,000
square feet of Class A life science space that is 100% leased
- Delivered a 90,000 square foot on-campus medical office
building at Grand Strand Medical Center, which was 71% leased upon
delivery
– Sold $1.4
billion of equity through a public follow-on offering and
our ATM equity program
– Directly issued or settled previous
forward sales agreements for 26.7 million shares, resulting in net
proceeds of $782 million
– Issued $2.1
billion of long-term senior unsecured notes, with proceeds
used to refinance near-term debt, including $1.7 billion of senior unsecured notes
– Upsized revolving credit facility to
$2.5 billion and originated a
$250 million unsecured term loan
facility
– Established a $1 billion unsecured commercial paper program
with $93 million outstanding at year
end
– Upgraded by Moody's to Baa1 (stable)
in January and by Fitch to BBB+ (stable) in October
– Added one new director in 2019 and
decreased average director tenure to 5 years
FOURTH QUARTER COMPARISON
|
Three Months
Ended
December 31, 2019
|
|
Three Months
Ended
December 31, 2018
|
(in thousands, except per share amounts)
|
Amount
|
|
Per Share
|
|
Amount
|
|
Per Share
|
Net income (loss),
diluted
|
$
|
43,200
|
|
|
$
|
0.09
|
|
|
$
|
831,965
|
|
|
$
|
1.73
|
|
NAREIT FFO,
diluted
|
195,892
|
|
|
0.39
|
|
|
195,187
|
|
|
0.41
|
|
FFO as Adjusted,
diluted
|
220,400
|
|
|
0.44
|
|
|
202,115
|
|
|
0.43
|
|
FAD,
diluted
|
170,641
|
|
|
|
|
168,001
|
|
|
|
FULL YEAR COMPARISON
|
Year Ended
December 31, 2019
|
|
Year Ended
December 31, 2018
|
(in thousands, except per share amounts)
|
Amount
|
|
Per Share
|
|
Amount
|
|
Per Share
|
Net income (loss),
diluted
|
$
|
43,987
|
|
|
$
|
0.09
|
|
|
$
|
1,065,343
|
|
|
$
|
2.24
|
|
NAREIT FFO,
diluted
|
786,899
|
|
|
1.59
|
|
|
780,189
|
|
|
1.66
|
|
FFO as Adjusted,
diluted
|
870,748
|
|
|
1.76
|
|
|
857,035
|
|
|
1.82
|
|
FAD,
diluted
|
752,411
|
|
|
|
|
746,397
|
|
|
|
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 "December 31, 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
twelve month SPP Cash NOI growth:
Year-Over-Year
Total SPP Cash NOI Growth
|
|
% of Total Full
Year SPP
|
Three
Month
|
Full
Year(1)
|
Medical
office
|
44.1%
|
2.7%
|
3.0%
|
Life
science
|
31.5%
|
5.3%
|
6.2%
|
Senior
housing
|
17.2%
|
3.3%
|
1.5%
|
Other non-reportable
segments ("Other")
|
7.1%
|
2.7%
|
2.6%
|
Total
Portfolio
|
100.0%
|
3.6%
|
3.7%
|
|
|
(1)
|
Full year SPP for
Senior housing and Total Portfolio would have been (0.9%) and 3.0%,
respectively, if the properties contributed to the SWF SH JV had
remained in SPP.
|
LIFE SCIENCE ACQUISITION
In January 2020, Healthpeak
executed a definitive agreement to acquire a $320 million, 426,000 square foot Class A life
science campus known as The Post, located in Waltham, within the Route 128 submarket of
Boston, Massachusetts and less
than one mile from Healthpeak's Hayden Research Campus. The 36-acre
campus is 100% leased to four well-established biopharmaceutical
and innovation companies, with a weighted average lease term of 11
years and contractual annual escalations of approximately 3%. With
an expansive physical footprint and superior build quality, The
Post is seeking LEED® certification. The acquisition
strengthens Healthpeak's presence in the Boston market, expanding its footprint to 1.8
million square feet (including Healthpeak's active and near-term
development pipeline). Additionally, the property has the potential
for increased density which may be considered at a future date.
The stabilized cash and GAAP capitalization rates are 5.1% and
6.5%, respectively. The acquisition is expected to close in the
second quarter of 2020.
HAYDEN RESEARCH CAMPUS DEVELOPMENT LEASING ACTIVITY
In January 2020, Healthpeak and
its partner King Street Properties, signed two leases totaling
122,000 square feet at its $160
million 75 Hayden development in Boston, Massachusetts. Each 10-year lease is
with a publicly-traded biotech company. The 214,000 square foot
Class A development project is now 57% pre-leased with both tenants
expected to assume occupancy in the fourth quarter of this
year.
75 Hayden is located within Healthpeak's Hayden Research campus,
which will encompass approximately 600,000 square feet of
state-of-the-art life science space in the Boston suburb of Lexington.
CAPITAL SENIOR LIVING ("CSU") AGREEMENT
In February 2020, Healthpeak
executed an agreement with CSU to convert the six properties in the
master lease due 2026 into a RIDEA structure effective February 1, 2020. The annual rent on the
properties is currently $4.4 million,
and the underlying EBITDAR was $3.7
million for the trailing twelve months ended December 31, 2019. Healthpeak is actively
marketing the six properties for sale and expects to close on the
dispositions in the next six to twelve months.
In October 2019, Healthpeak
entered into an agreement for the early termination of a separate
nine-property master lease with CSU, originally scheduled to mature
in October 2020. As part of the
agreement, Healthpeak converted one property from a triple-net
lease to RIDEA and transitioned management to Discovery Senior
Living. Healthpeak is marketing the remaining eight assets for
sale.
Upon completion of these transactions, Healthpeak will have no
investments with CSU.
PREVIOUSLY ANNOUNCED LIFE SCIENCE TRANSACTIONS
35 CAMBRIDGEPARK DRIVE
In December 2019, Healthpeak
closed on the $333 million
acquisition of 35 CambridgePark Drive, a 224,000 square foot,
LEED® Gold® laboratory building located in
the Cambridge submarket of
Boston, Massachusetts. The
transaction 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 BOARDWALK LIFE SCIENCE DEVELOPMENT
In December 2019, Healthpeak
announced the addition of a $164
million life science project to its development pipeline.
The Boardwalk, totaling 190,000 square feet, is located on Science
Center Drive in the Torrey Pines
life science cluster in San Diego.
The campus will combine three adjacent Healthpeak holdings,
activating two land sites through 105,000 square feet of ground-up
development that will flank both sides of an existing 85,000 square
foot property that will also be redeveloped. Construction at The
Boardwalk commenced in the fourth quarter, with expected occupancy
in the second quarter of 2021. Upon stabilization, the campus is
projected to generate an estimated yield on cost of 7%. 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.
LIFE SCIENCE LEASING ACTIVITY
In January 2020, Healthpeak
announced it executed a long-term lease with Janssen BioPharma,
Inc., part of the Johnson & Johnson Family of Companies, for
approximately 60% of Phase II of The Shore at Sierra Point. The
lease is expected to commence in January
2022, upon completion of construction. Janssen BioPharma,
Inc. has expansion rights under the lease that can be exercised
over the course of 2020. Healthpeak also designed and entitled
additions to the project such that Phase II of The Shore at Sierra
Point will represent approximately 298,000 square feet, an increase
from the initial plan for 266,000 square feet.
In December 2019, Healthpeak
announced a lease amendment and extension with Amgen at
Healthpeak's Britannia Oyster Point campus in South San
Francisco. This campus consists of ten buildings totaling over
900,000 square feet of Class-A life science space. Amgen currently
leases space in seven of the ten buildings, three of which are
subleased by Amgen to third parties. The amendment provides Amgen
the ability to extend the leases at three of the buildings it
currently occupies through 2029, while at the same time providing
Amgen flexibility to terminate its occupancy in these buildings at
earlier dates subject to advance notice requirements.
Copies of the corresponding press releases with additional
details are available on the Investor Relations section of our
website at http://ir.healthpeak.com.
PREVIOUSLY ANNOUNCED SENIOR HOUSING TRANSACTIONS
OAKMONT PURCHASE OPTION AGREEMENT
In December 2019, Healthpeak and
Oakmont entered into an agreement that provides Healthpeak the
option to acquire up to 24 of Oakmont's senior housing development
properties upon stabilization (the "Development Properties"). The
Development Properties are concentrated in California and have a projected value of
approximately $1.3 billion in the
aggregate. The acquisition options are expected to be offered in
tranches between 2020 and 2023. Once offered, Healthpeak has the
option to acquire each applicable tranche of the Development
Properties based on a pre-determined pricing formula with a
projected year-one cash capitalization rate equal to 5.5%. 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.
BROOKDALE CCRC AND
TRIPLE-NET TRANSACTIONS
In January 2020, Healthpeak closed
on the previously announced transactions with Brookdale related to the 15-property CCRC
joint venture and the 43-property triple-net portfolio.
Key transaction highlights are as follows:
- Healthpeak acquired Brookdale's 51% interest in 13 CCRCs with
6,383 units and 570 acres of land for $541
million, plus payment of $100
million management termination fee, and transitioned
management of the CCRCs to Life Care Services
- Healthpeak sold 18 triple-net properties to Brookdale for $405
million
- Healthpeak will terminate the triple-net lease related to one
property and transition it to a SHOP structure with Life Care
Services
- Healthpeak restructured the remaining 24 triple-net properties
operated by Brookdale, that were
in 11 separate lease pools, into a single master lease with a
December 31, 2027 maturity date and a
2.4% annual rent escalator
Additional details can be found in the October 1, 2019 press release, the "Healthpeak
Brookdale Transaction Update – October 30,
2019" presentation and the "Guidance Addendum" presentation
on the Investor Presentations section of our website at
https://ir.healthpeak.com/investor-presentations.
SOVEREIGN WEALTH FUND SENIOR HOUSING JOINT VENTURE
TRANSACTION
In December 2019, Healthpeak
closed on a $790 million SWF SH JV in
which Healthpeak sold a 46.5% interest in a 19-property senior
housing operating portfolio managed by Brookdale to a sovereign wealth fund. The
properties consist of 3,366 units and are located in Texas, Colorado, Illinois, Tennessee and Maryland, with an average age of 23 years.
U.K. PORTFOLIO SALE
In December 2019, Healthpeak
closed on the sale of its remaining 49% interest in its U.K.
holdings to Omega Healthcare Investors, Inc. for net proceeds of
approximately $91 million.
PREVIOUSLY ANNOUNCED MEDICAL OFFICE TRANSACTIONS
MEDICAL OFFICE DEVELOPMENT PROGRAM WITH HCA
As part of the development program with HCA, Healthpeak signed a
definitive agreement on an additional development project located
on the TriStar Centennial Medical Center Campus in Nashville, TN. The 172,000 square foot
six-story Class A medical office building has an estimated spend of
$49 million. The project is 45%
pre-leased and construction is expected to commence in the first
quarter of 2020.
LEADERSHIP ANNOUNCEMENT
In January 2020, Justin Hill joined Healthpeak as Senior Vice
President - Medical Office Properties. Mr. Hill will report to
Healthpeak's President and Chief Investment Officer, Scott Brinker, and will be responsible for
business development in Healthpeak's Medical Office segment. He
joins Healthpeak from JLL, a leading global commercial real estate
services company, where he served as Executive Vice President,
Healthcare Capital Markets. Prior to joining JLL, Mr. Hill worked
at Welltower Inc. from 2008 to 2018, most recently serving as
Senior Vice President - Business Development. 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.
BALANCE SHEET AND CAPITAL MARKET ACTIVITIES
SENIOR UNSECURED NOTES
In November 2019, Healthpeak
completed a public offering of $750
million 3.00% senior unsecured notes due 2030. Net proceeds
from the offering were used: (i) to redeem all of Healthpeak's
outstanding $350 million 4.00% senior
unsecured notes due December 2022,
(ii) to repay outstanding borrowings under its revolving credit
facility, (iii) to repay its outstanding commercial paper, and (iv)
for other general corporate purposes. Healthpeak recorded a loss on
debt extinguishment of approximately $22
million in the fourth quarter.
EQUITY CAPITAL MARKETS
From November 2019 through
January 2020, Healthpeak sold 23.1
million shares of common stock on a forward basis, for gross
proceeds of $797 million:
– In December
2019, Healthpeak completed a public follow-on offering of
15.6 million shares of common stock priced at $35.00 per share, for gross proceeds of
$547 million
– From November
2019 through January 2020,
Healthpeak sold 7.5 million shares of common stock under the ATM
equity program, for gross proceeds of $250
million
As of February 7, 2020, Healthpeak
had 32 million shares outstanding under forward contracts,
equivalent to approximately $1
billion. Healthpeak expects to settle the forward contracts
and use the proceeds during 2020 to fund acquisition activities,
including the Brookdale
transactions and The Post, and development spending.
REVOLVING CREDIT FACILITY AND COMMERCIAL PAPER
PROGRAM
As of February 7, 2020, Healthpeak
had no outstanding balance under its revolving credit facility and
$480 million outstanding under its
commercial paper program, resulting in over $2 billion of remaining borrowing capacity.
BOARD OF DIRECTORS APPOINTMENT
On November 5, 2019, Healthpeak
appointed Sara Grootwassink Lewis as
an independent director to its Board, leveraging her corporate
finance and capital markets expertise, as well as over 15 years of
boardroom experience. She has served on several public
company boards, and currently is a director of both Sun Life
Financial and Weyerhaeuser Company. Ms. Lewis has also been
part of executive management at public REITs. Her appointment
expands Healthpeak's Board to eight directors, with an average
director tenure of approximately five years. A copy of the
press release announcing Ms. Lewis' appointment, along with
additional details, is available on the Investor Relations section
of our website at http://ir.healthpeak.com.
DIVIDEND
On January 30, 2020, Healthpeak
announced that its Board declared a quarterly cash dividend of
$0.37 per common share. The dividend
will be paid on February 28, 2020 to
stockholders of record as of the market close on February 18, 2020.
SUSTAINABILITY
Healthpeak's position as a leader in environmental, social and
governance (ESG) performance has been recognized by various
organizations around the world. For the seventh consecutive year,
Healthpeak has been named to CDP's Leadership Band with a score of
A-, as well as Dow Jones' North America Sustainability Index for
demonstrating best-in-class sustainable business practices.
Additionally, for the eighth consecutive year, Healthpeak has
received the Green Star designation from GRESB for excellence in
sustainability implementation and transparency. Healthpeak was also
named to Bloomberg Gender-Equality Index, Investors' Business
Daily's Top 50 ESG Companies list and Newsweek's list of America's
Most Responsible Companies. Healthpeak also received NAREIT's
Dividends Through Diversity Award. More information about
Healthpeak's sustainability efforts, including a link to our eighth
annual Sustainability Report, is available on our website at
www.healthpeak.com/corporate-responsibility/.
2020 GUIDANCE
You can find a detailed presentation outlining guidance
assumptions and other important information in the Guidance
Addendum posted to the "Investor Presentations" section of our
website at https://ir.healthpeak.com/investor-presentations.
For full year 2020, we have established the following guidance
ranges:
- Diluted earnings per common share to range between $0.70 to $0.76
- Diluted NAREIT FFO per share of $1.64 to $1.70
- Diluted FFO as Adjusted per share of $1.77 to $1.83
- Blended Total Portfolio Same-Store Cash NOI growth of 2.00% to
3.00%
Key Assumptions
- Components to initial blended Total Portfolio Same-Store Cash
NOI guidance:
-
- Medical Office: 1.75% to 2.75%
- Life Science: 4.00% to 5.00%
- Senior Housing: (1.00%) to 1.00%
- Other: 1.75% to 2.50%
- Senior Housing Same-Store Cash NOI: At the mid-point, assumes
triple-net portfolio growth of 2.50% and SHOP growth of
(2.50%)
These estimates do not reflect the potential impact from
unannounced future transactions other than capital recycling
activities. For additional details and information regarding these
estimates, see the 2020 Guidance section of our corresponding
Supplemental Report and the Discussion and Reconciliation of
Non-GAAP Financial Measures, which are both available in the
Investor Relations section of our website
at http://ir.healthpeak.com.
COMPANY INFORMATION
Healthpeak has scheduled a conference call and webcast for
Wednesday, February 12, 2020, at
9:00 a.m. Pacific Time (12:00 p.m. Eastern Time) to
present its performance and operating results for the fourth
quarter and full year ended December
31, 2019. The conference call is accessible by dialing
(888) 317-6003 (U.S.) or (412) 317-6061 (International). The
conference ID number is 5416031. You may also access the conference
call via webcast in the Investor Relations section of our website
at http://ir.healthpeak.com. An archive of the webcast will be
available on Healthpeak's website through February 12, 2021, and a telephonic replay can be
accessed through February 27, 2020,
by dialing (877) 344-7529 (U.S.) or (412) 317-0088 (International)
and entering conference ID number 10137451. Our Supplemental Report
for the current period is also available, with this earnings
release, in the Investor Relations section of our website.
ABOUT HEALTHPEAK
Healthpeak Properties, Inc. is a fully integrated real estate
investment trust (REIT) and S&P 500 company. Healthpeak owns
and develops high-quality real estate in the three private-pay
healthcare asset classes of Life Science, Senior Housing and
Medical Office, designed to provide stability through the
inevitable industry cycles. At Healthpeak, we pair our deep
understanding of the healthcare real estate market with a strong
vision for long-term growth. For more information regarding
Healthpeak, visit www.healthpeak.com.
FORWARD-LOOKING STATEMENTS
Statements 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,
capital recycling plans, financing activities, or other
transactions discussed in this release; (ii) the payment of a
quarterly cash dividend; and (iii) all statements and assumptions
under the heading "2020 Guidance," including without limitation
with respect to expected net income, NAREIT FFO per share, FFO as
Adjusted per share, Same-Store Cash NOI growth and other financial
projections and assumptions, as well as comparable statements
included in other sections of this
release. Forward-looking statements reflect our current
expectations and views about future events and are subject to risks
and uncertainties that could significantly affect our future
financial condition and results of operations. While
forward-looking statements reflect our good faith belief and
assumptions we believe to be reasonable based upon current
information, we can give no assurance that our expectations or
forecasts will be attained. Further, we cannot guarantee the
accuracy of any such forward-looking statement contained in this
release, and such forward-looking statements are subject to known
and unknown risks and uncertainties that are difficult to
predict. These risks and uncertainties include, but are not
limited to: the financial condition of our existing and future
tenants, operators and borrowers, including potential bankruptcies
and downturns in their businesses, and their legal and regulatory
proceedings, which results in uncertainties regarding our ability
to continue to realize the full benefit of such tenants' and
operators' leases and borrowers' loans; the ability of our existing
and future tenants, operators and borrowers to conduct their
respective businesses in a manner sufficient to maintain or
increase their revenues and manage their expenses in order to
generate sufficient income to make rent and loan payments to us and
our ability to recover investments made, if applicable, in their
operations; our concentration in the healthcare property sector,
particularly in senior housing, life sciences and medical office
buildings, which makes our profitability more vulnerable to a
downturn in a specific sector than if we were investing in multiple
industries; operational risks associated with third party
management contracts, including the additional regulation and
liabilities of our RIDEA lease structures; the effect on us and our
tenants and operators of legislation, executive orders and other
legal requirements, including compliance with the Americans with
Disabilities Act, fire, safety and health regulations,
environmental laws, the Affordable Care Act, licensure,
certification and inspection requirements, and laws addressing
entitlement programs and related services, including Medicare and
Medicaid, which may result in future reductions in reimbursements
or fines for noncompliance; our ability to identify replacement
tenants and operators and the potential renovation costs and
regulatory approvals associated therewith; the risks associated
with property development and redevelopment, including costs above
original estimates, project delays and lower occupancy rates and
rents than expected; the potential impact of uninsured or
underinsured losses; the risks associated with our investments in
joint ventures and unconsolidated entities, including our lack of
sole decision making authority and our reliance on our partners'
financial condition and continued cooperation; competition for the
acquisition and financing of suitable healthcare properties as well
as competition for tenants and operators, including with respect to
new leases and mortgages and the renewal or rollover of existing
leases; our or our counterparties' ability to fulfill obligations,
such as financing conditions and/or regulatory approval
requirements, required to successfully consummate acquisitions,
dispositions, transitions, developments, redevelopments, joint
venture transactions or other transactions; our ability to achieve
the benefits of acquisitions or other investments within expected
time frames or at all, or within expected cost projections; the
potential impact on us and our tenants, operators and borrowers
from current and future litigation matters, including the
possibility of larger than expected litigation costs, adverse
results and related developments; changes in federal, state or
local laws and regulations, including those affecting the
healthcare industry that affect our costs of compliance or increase
the costs, or otherwise affect the operations, of our tenants and
operators; our ability to foreclose on collateral securing our real
estate-related loans; volatility or uncertainty in the capital
markets, the availability and cost of capital as impacted by
interest rates, changes in our credit ratings, the value of our
common stock, and other conditions that may adversely impact our
ability to fund our obligations or consummate transactions, or
reduce the earnings from potential transactions; changes in global,
national and local economic and other conditions; our ability to
manage our indebtedness level and changes in the terms of such
indebtedness; competition for skilled management and other key
personnel; our reliance on information technology systems and
the potential impact of system failures, disruptions or breaches;
our ability to maintain our qualification as a real estate
investment trust; and other risks and uncertainties described from
time to time in our Securities and Exchange Commission
filings. Except as required by law, we do not undertake, and
hereby disclaim, any obligation to update any forward-looking
statements, which speak only as of the date on which they are
made.
CONTACT
Barbat Rodgers
Senior Director – Investor Relations
949-407-0400
Healthpeak
Properties, Inc.
|
|
Consolidated
Balance Sheets
|
|
In thousands,
except share and per share data
|
|
|
|
|
December 31,
2019
|
|
December 31,
2018
|
|
Assets
|
|
|
|
|
Real
estate:
|
|
|
|
|
Buildings and
improvements
|
$
|
11,120,039
|
|
|
$
|
10,877,248
|
|
|
Development costs and
construction in progress
|
692,336
|
|
|
537,643
|
|
|
Land
|
1,992,602
|
|
|
1,637,506
|
|
|
Accumulated
depreciation and amortization
|
(2,771,922)
|
|
|
(2,842,947)
|
|
|
Net real
estate
|
11,033,055
|
|
|
10,209,450
|
|
|
Net investment in
direct financing leases
|
84,604
|
|
|
713,818
|
|
|
Loans receivable,
net
|
190,579
|
|
|
62,998
|
|
|
Investments in and
advances to unconsolidated joint ventures
|
825,515
|
|
|
540,088
|
|
|
Accounts receivable,
net of allowance of $4,565 and $5,127
|
59,417
|
|
|
48,171
|
|
|
Cash and cash
equivalents
|
144,232
|
|
|
110,790
|
|
|
Restricted
cash
|
40,425
|
|
|
29,056
|
|
|
Intangible assets,
net
|
331,693
|
|
|
305,079
|
|
|
Assets held for sale,
net
|
504,394
|
|
|
108,086
|
|
|
Right-of-use asset,
net
|
172,486
|
|
|
—
|
|
|
Other assets,
net
|
646,491
|
|
|
591,017
|
|
|
Total
assets
|
$
|
14,032,891
|
|
|
$
|
12,718,553
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
Bank line of credit
and commercial paper
|
$
|
93,000
|
|
|
$
|
80,103
|
|
|
Term loan
|
248,942
|
|
|
—
|
|
|
Senior unsecured
notes
|
5,647,993
|
|
|
5,258,550
|
|
|
Mortgage
debt
|
276,907
|
|
|
138,470
|
|
|
Other debt
|
84,771
|
|
|
90,785
|
|
|
Intangible
liabilities, net
|
74,991
|
|
|
54,663
|
|
|
Liabilities of assets
held for sale, net
|
36,369
|
|
|
1,125
|
|
|
Lease
liability
|
156,611
|
|
|
—
|
|
|
Accounts payable and
accrued liabilities
|
456,153
|
|
|
391,583
|
|
|
Deferred
revenue
|
289,680
|
|
|
190,683
|
|
|
Total
liabilities
|
7,365,417
|
|
|
6,205,962
|
|
|
Commitments and
contingencies
|
|
|
|
|
Common stock, $1.00
par value: 750,000,000 shares authorized; 505,221,643 and
477,496,499 shares issued and outstanding
|
505,222
|
|
|
477,496
|
|
|
Additional paid-in
capital
|
9,183,892
|
|
|
8,398,847
|
|
|
Cumulative dividends
in excess of earnings
|
(3,601,199)
|
|
|
(2,927,196)
|
|
|
Accumulated other
comprehensive income (loss)
|
(2,857)
|
|
|
(4,708)
|
|
|
Total stockholders'
equity
|
6,085,058
|
|
|
5,944,439
|
|
|
|
|
|
|
|
Joint venture
partners
|
378,061
|
|
|
391,401
|
|
|
Non-managing member
unitholders
|
204,355
|
|
|
176,751
|
|
|
Total noncontrolling
interests
|
582,416
|
|
|
568,152
|
|
|
Total
equity
|
6,667,474
|
|
|
6,512,591
|
|
|
|
|
|
|
|
Total liabilities
and equity
|
$
|
14,032,891
|
|
|
$
|
12,718,553
|
|
|
Healthpeak
Properties, Inc.
|
|
Consolidated
Statements of Operations
|
|
In thousands,
except per share data
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
(unaudited)
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Rental and related
revenues
|
$
|
314,059
|
|
|
$
|
298,790
|
|
|
$
|
1,222,078
|
|
|
$
|
1,237,236
|
|
|
Resident fees and
services
|
210,479
|
|
|
127,826
|
|
|
727,980
|
|
|
544,773
|
|
|
Income from direct
financing leases
|
4,177
|
|
|
13,945
|
|
|
37,481
|
|
|
54,274
|
|
|
Interest
income
|
2,976
|
|
|
1,358
|
|
|
9,844
|
|
|
10,406
|
|
|
Total
revenues
|
531,691
|
|
|
441,919
|
|
|
1,997,383
|
|
|
1,846,689
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Interest
expense
|
58,120
|
|
|
54,717
|
|
|
225,619
|
|
|
266,343
|
|
|
Depreciation and
amortization
|
190,798
|
|
|
130,759
|
|
|
659,989
|
|
|
549,499
|
|
|
Operating
|
248,382
|
|
|
177,413
|
|
|
879,370
|
|
|
705,038
|
|
|
General and
administrative
|
21,521
|
|
|
21,510
|
|
|
92,966
|
|
|
96,702
|
|
|
Transaction
costs
|
1,569
|
|
|
1,684
|
|
|
8,743
|
|
|
10,772
|
|
|
Impairments
(recoveries), net
|
110,284
|
|
|
36,080
|
|
|
225,937
|
|
|
55,260
|
|
|
Total costs and
expenses
|
630,674
|
|
|
422,163
|
|
|
2,092,624
|
|
|
1,683,614
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Gain (loss) on sales
of real estate, net
|
4,193
|
|
|
763,774
|
|
|
22,900
|
|
|
925,985
|
|
|
Loss on debt
extinguishments
|
(22,213)
|
|
|
(263)
|
|
|
(58,364)
|
|
|
(44,162)
|
|
|
Other income
(expense), net
|
157,296
|
|
|
50,333
|
|
|
182,129
|
|
|
13,316
|
|
|
Total other income
(expense), net
|
139,276
|
|
|
813,844
|
|
|
146,665
|
|
|
895,139
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
before income taxes and equity income (loss) from unconsolidated
joint ventures
|
40,293
|
|
|
833,600
|
|
|
51,424
|
|
|
1,058,214
|
|
|
Income tax benefit
(expense)
|
5,679
|
|
|
2,935
|
|
|
17,262
|
|
|
17,854
|
|
|
Equity income (loss)
from unconsolidated joint ventures
|
1,387
|
|
|
(2,152)
|
|
|
(8,625)
|
|
|
(2,594)
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
47,359
|
|
|
834,383
|
|
|
60,061
|
|
|
1,073,474
|
|
|
Noncontrolling
interests' share in earnings
|
(3,839)
|
|
|
(2,835)
|
|
|
(14,531)
|
|
|
(12,381)
|
|
|
Net income (loss)
attributable to Healthpeak Properties, Inc.
|
43,520
|
|
|
831,548
|
|
|
45,530
|
|
|
1,061,093
|
|
|
Participating
securities' share in earnings
|
(320)
|
|
|
(2,223)
|
|
|
(1,543)
|
|
|
(2,669)
|
|
|
Net income (loss)
applicable to common shares
|
$
|
43,200
|
|
|
$
|
829,325
|
|
|
$
|
43,987
|
|
|
$
|
1,058,424
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
common share:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.09
|
|
|
$
|
1.75
|
|
|
$
|
0.09
|
|
|
$
|
2.25
|
|
|
Diluted
|
$
|
0.09
|
|
|
$
|
1.73
|
|
|
$
|
0.09
|
|
|
$
|
2.24
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
497,116
|
|
|
472,998
|
|
|
486,255
|
|
|
470,551
|
|
|
Diluted
|
500,493
|
|
|
479,906
|
|
|
489,335
|
|
|
475,387
|
|
|
Healthpeak
Properties, Inc.
|
|
Funds From
Operations
|
|
In thousands,
except per share data
|
|
(unaudited)
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Net income (loss)
applicable to common shares
|
|
$
|
43,200
|
|
|
$
|
829,325
|
|
|
$
|
43,987
|
|
|
$
|
1,058,424
|
|
|
Real estate related
depreciation and amortization
|
|
190,798
|
|
|
130,759
|
|
|
659,989
|
|
|
549,499
|
|
|
Healthpeak's share of
real estate related depreciation and amortization from
unconsolidated joint ventures
|
|
15,151
|
|
|
15,237
|
|
|
60,303
|
|
|
63,967
|
|
|
Noncontrolling
interests' share of real estate related depreciation and
amortization
|
|
(5,128)
|
|
|
(3,828)
|
|
|
(20,054)
|
|
|
(11,795)
|
|
|
Other real
estate-related depreciation and amortization
|
|
1,357
|
|
|
2,071
|
|
|
6,155
|
|
|
6,977
|
|
|
Loss (gain) on sales
of real estate, net
|
|
(4,193)
|
|
|
(763,774)
|
|
|
(22,900)
|
|
|
(925,985)
|
|
|
Healthpeak's share of
loss (gain) on sales of real estate, net, from unconsolidated joint
ventures
|
|
(2,118)
|
|
|
—
|
|
|
(2,118)
|
|
|
—
|
|
|
Noncontrolling
interests' share of gain (loss) on sales of real estate,
net
|
|
129
|
|
|
—
|
|
|
335
|
|
|
—
|
|
|
Loss (gain) upon
change of control, net(1)
|
|
(155,225)
|
|
|
(50,171)
|
|
|
(166,707)
|
|
|
(9,154)
|
|
|
Taxes associated with
real estate dispositions
|
|
—
|
|
|
2,765
|
|
|
—
|
|
|
3,913
|
|
|
Impairments
(recoveries) of depreciable real estate,
net(2)
|
|
110,284
|
|
|
32,803
|
|
|
221,317
|
|
|
44,343
|
|
|
NAREIT FFO applicable
to common shares
|
|
194,255
|
|
|
195,187
|
|
|
780,307
|
|
|
780,189
|
|
|
Distributions on
dilutive convertible units and other
|
|
1,637
|
|
|
—
|
|
|
6,592
|
|
|
—
|
|
|
Diluted NAREIT FFO
applicable to common shares
|
|
$
|
195,892
|
|
|
$
|
195,187
|
|
|
$
|
786,899
|
|
|
$
|
780,189
|
|
|
Diluted NAREIT FFO
per common share
|
|
$
|
0.39
|
|
|
$
|
0.41
|
|
|
$
|
1.59
|
|
|
$
|
1.66
|
|
|
Weighted average
shares outstanding - diluted NAREIT FFO
|
|
506,017
|
|
|
473,289
|
|
|
494,335
|
|
|
470,719
|
|
|
Impact of adjustments
to NAREIT FFO:
|
|
|
|
|
|
|
|
|
|
Transaction-related
items
|
|
$
|
1,688
|
|
|
$
|
2,416
|
|
|
$
|
15,347
|
|
|
$
|
11,029
|
|
|
Other impairments
(recoveries) and losses (gains), net(3)
|
|
—
|
|
|
3,277
|
|
|
10,147
|
|
|
7,619
|
|
|
Severance and related
charges(4)
|
|
—
|
|
|
595
|
|
|
5,063
|
|
|
13,906
|
|
|
Loss on debt
extinguishments(5)
|
|
22,213
|
|
|
263
|
|
|
58,364
|
|
|
44,162
|
|
|
Litigation costs
(recoveries)
|
|
29
|
|
|
323
|
|
|
(520)
|
|
|
363
|
|
|
Casualty-related
charges (recoveries), net(6)
|
|
530
|
|
|
—
|
|
|
(4,106)
|
|
|
—
|
|
|
Foreign currency
remeasurement losses (gains)
|
|
100
|
|
|
72
|
|
|
(250)
|
|
|
(35)
|
|
|
Total
adjustments
|
|
24,560
|
|
|
6,946
|
|
|
84,045
|
|
|
77,044
|
|
|
FFO as Adjusted
applicable to common shares
|
|
218,815
|
|
|
202,133
|
|
|
864,352
|
|
|
857,233
|
|
|
Distributions on
dilutive convertible units and other
|
|
1,585
|
|
|
(18)
|
|
|
6,396
|
|
|
(198)
|
|
|
Diluted FFO as
Adjusted applicable to common shares
|
|
$
|
220,400
|
|
|
$
|
202,115
|
|
|
$
|
870,748
|
|
|
$
|
857,035
|
|
|
Diluted FFO as
Adjusted per common share
|
|
$
|
0.44
|
|
|
$
|
0.43
|
|
|
$
|
1.76
|
|
|
$
|
1.82
|
|
|
Weighted average
shares outstanding - diluted FFO as Adjusted
|
|
506,017
|
|
|
473,289
|
|
|
494,335
|
|
|
470,719
|
|
|
_______________________________________
|
(1)
|
For the three months
ended December 31, 2019, primarily relates to the gain related to
the deconsolidation of 19 previously consolidated senior housing
assets that were contributed into a new unconsolidated joint
venture (Sovereign Wealth Fund Senior Housing JV). For the year
ended December 31, 2019, also includes the gain related to the
acquisition of the outstanding equity interests in a previously
unconsolidated senior housing joint venture (Vintage Park). For the
three months ended December 31, 2018, represents the gain related
to the acquisition of our partner's interests in four previously
unconsolidated life science assets. For the year ended December 31,
2018, also includes the loss on consolidation of seven U.K. care
homes.
|
(2)
|
For the year ended
December 31, 2019, includes a $6 million impairment charge related
to depreciable real estate held by the CCRC JV, which we recognized
in equity income (loss) from unconsolidated joint ventures in the
consolidated statement of operations.
|
(3)
|
For the year ended
December 31, 2019, represents the impairment of 13 senior housing
triple-net facilities under direct financing leases recognized as a
result of entering into sales agreements. For the year ended
December 31, 2018, represents the impairment of an undeveloped life
science land parcel classified as held for sale, partially offset
by an impairment recovery upon the sale of a mezzanine loan
investment in March 2018.
|
(4)
|
For the year
ended December 31, 2018, primarily relates to the departure of
our former Executive Chairman and corporate restructuring
activities.
|
(5)
|
For all periods
presented, represents the premium associated with the prepayment of
senior unsecured notes.
|
(6)
|
For the three months
ended December 31, 2019, represents evacuation costs related to
hurricanes. The year ended December 31, 2019 also includes
incremental insurance proceeds related to hurricanes in
2017.
|
Healthpeak
Properties, Inc.
|
|
Funds Available
for Distribution
|
|
In
thousands
|
|
(unaudited)
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
FFO as Adjusted
applicable to common shares
|
$
|
218,815
|
|
|
$
|
202,133
|
|
|
$
|
864,352
|
|
|
$
|
857,233
|
|
|
Amortization of
deferred compensation(1)
|
3,177
|
|
|
3,465
|
|
|
14,790
|
|
|
14,714
|
|
|
Amortization of
deferred financing costs
|
2,689
|
|
|
2,851
|
|
|
10,863
|
|
|
12,612
|
|
|
Straight-line
rents
|
(6,259)
|
|
|
(2,251)
|
|
|
(28,451)
|
|
|
(23,138)
|
|
|
FAD capital
expenditures
|
(46,004)
|
|
|
(35,956)
|
|
|
(108,844)
|
|
|
(106,193)
|
|
|
Lease restructure
payments
|
284
|
|
|
294
|
|
|
1,153
|
|
|
1,195
|
|
|
CCRC entrance
fees(2)
|
4,785
|
|
|
4,677
|
|
|
18,856
|
|
|
17,880
|
|
|
Deferred income
taxes
|
(4,909)
|
|
|
(5,993)
|
|
|
(18,972)
|
|
|
(18,744)
|
|
|
Other FAD
adjustments(3)
|
(3,574)
|
|
|
(1,219)
|
|
|
(7,927)
|
|
|
(9,162)
|
|
|
FAD applicable to
common shares
|
169,004
|
|
|
168,001
|
|
|
745,820
|
|
|
746,397
|
|
|
Distributions on
dilutive convertible units and other
|
1,637
|
|
|
—
|
|
|
6,591
|
|
|
—
|
|
|
Diluted FAD
applicable to common shares
|
$
|
170,641
|
|
|
$
|
168,001
|
|
|
$
|
752,411
|
|
|
$
|
746,397
|
|
|
Weighted average
shares outstanding - diluted FAD
|
506,017
|
|
|
473,289
|
|
|
494,335
|
|
|
470,719
|
|
|
_______________________________________
|
(1)
|
Excludes amounts
related to the acceleration of deferred compensation for restricted
stock units that vested upon the departure of certain former
employees, which have already been excluded from FFO as Adjusted in
severance and related charges.
|
(2)
|
Represents our 49%
share of our CCRC JV's non-refundable entrance fees collected in
excess of amortization.
|
(3)
|
Primarily includes
our share of FAD capital expenditures from unconsolidated joint
ventures, partially offset by noncontrolling interests' share of
FAD capital expenditures from consolidated joint
ventures.
|
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SOURCE Healthpeak Properties, Inc.