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Healthpeak Properties, Inc. reported second-quarter 2023 funds from operations (FFO) as adjusted per share of 45 cents, beating the Zacks Consensus Estimate by a whisker. The reported figure improved 2.3% from the year-ago quarter.
Results reflect better-than-anticipated revenues. Moreover, year-over-year improvement in same-store portfolio cash (adjusted) net operating income (NOI) was witnessed across the portfolio. The company revised its 2023 outlook.
The healthcare real estate investment trust (REIT) generated revenues of $545.4 million, outpacing the Zacks Consensus Estimate of $535.7 million. Moreover, the figure was 5.3% higher than the prior-year quarter’s $517.9 million.
Behind the Headlines
In the second quarter, Healthpeak reported 4.8% year-over-year growth in the total same-store portfolio cash-adjusted NOI, surpassing our estimate of 4.3%.
It witnessed 3.8% and 2.5% year-over-year growth in the same-store portfolio cash (adjusted) NOI for its lab and outpatient medical segments, respectively. Also, the same-store portfolio cash-adjusted NOI for the CCRC portfolio improved 19.3% from the prior-year quarter.
Portfolio Activity
During the reported quarter, Healthpeak executed life science new and renewal leases totaling 150,000 square feet while the same for outpatient medical aggregated 595,000 square feet.
The company placed in-service Nexus on Grand, a 100% leased lab development located on East Grand Avenue in the heart of South San Francisco. This represented an investment of $161 million. The property features state-of-the-art lab space and includes a café, fitness center and several indoor and outdoor meeting areas within the entry plaza.
Balance Sheet
Healthpeak exited the second quarter with cash and cash equivalents of $103.8 million, up from $59.2 million as of Mar 31, 2023. Its net debt to adjusted EBITDAre was 5.1X as of Jun 30, 2023.
Dividend Update
Concurrent with its second-quarter earnings release, Healthpeak’s board of directors announced a quarterly cash dividend of 30 cents per common share. The dividend will be paid out on Aug 18 to shareholders on record as of Aug 7, 2023.
2023 Guidance Revised
Healthpeak revised its guidance for 2023 FFO as adjusted per share to the range of $1.73–$1.77 from $1.71–$1.77 guided earlier. The Zacks Consensus Estimate for the same is currently pegged at $1.73, which lies within the guided range.
The same-store total portfolio cash-adjusted NOI growth for the total portfolio was revised upward to 3.25-4.75% from 3.00-4.50% estimated earlier.
Prologis, Inc. (PLD - Free Report) reported second-quarter 2023 core FFO per share of $1.83, beating the Zacks Consensus Estimate of $1.68. The figure also compared favorably with the year-ago quarter’s figure of $1.11.
Results of this industrial REIT, which announced the acquisition of industrial properties from opportunistic real estate funds affiliated with Blackstone worth $3.1 billion in June, reflected robust leasing activity and solid rent growth. Prologis also raised the midpoint of its 2023 core FFO per share guidance.
Crown Castle Inc. (CCI - Free Report) reported second-quarter 2023 AFFO per share of $2.05, outpacing the Zacks Consensus Estimate of $1.99. The reported figure climbed 13.9% from the year-ago quarter’s tally of $1.80.
The results reflected better-than-anticipated revenues aided by robust site-rental revenue growth. However, CCI lowered its outlook for 2023, citing that it expects a decline in tower activity for the remainder of the year due to reduced network spending by wireless carriers.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported second-quarter 2023 AFFO per share of $2.24, surpassing the Zacks Consensus Estimate of $2.20. The reported figure climbed 6.7% from the year-ago quarter’s tally.
ARE’s results reflected better-than-expected revenues on healthy leasing activity and solid rental rate growth.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Healthpeak's (PEAK) Q2 FFO & Revenues Beat, '23 View Revised
Healthpeak Properties, Inc. reported second-quarter 2023 funds from operations (FFO) as adjusted per share of 45 cents, beating the Zacks Consensus Estimate by a whisker. The reported figure improved 2.3% from the year-ago quarter.
Results reflect better-than-anticipated revenues. Moreover, year-over-year improvement in same-store portfolio cash (adjusted) net operating income (NOI) was witnessed across the portfolio. The company revised its 2023 outlook.
The healthcare real estate investment trust (REIT) generated revenues of $545.4 million, outpacing the Zacks Consensus Estimate of $535.7 million. Moreover, the figure was 5.3% higher than the prior-year quarter’s $517.9 million.
Behind the Headlines
In the second quarter, Healthpeak reported 4.8% year-over-year growth in the total same-store portfolio cash-adjusted NOI, surpassing our estimate of 4.3%.
It witnessed 3.8% and 2.5% year-over-year growth in the same-store portfolio cash (adjusted) NOI for its lab and outpatient medical segments, respectively. Also, the same-store portfolio cash-adjusted NOI for the CCRC portfolio improved 19.3% from the prior-year quarter.
Portfolio Activity
During the reported quarter, Healthpeak executed life science new and renewal leases totaling 150,000 square feet while the same for outpatient medical aggregated 595,000 square feet.
The company placed in-service Nexus on Grand, a 100% leased lab development located on East Grand Avenue in the heart of South San Francisco. This represented an investment of $161 million. The property features state-of-the-art lab space and includes a café, fitness center and several indoor and outdoor meeting areas within the entry plaza.
Balance Sheet
Healthpeak exited the second quarter with cash and cash equivalents of $103.8 million, up from $59.2 million as of Mar 31, 2023. Its net debt to adjusted EBITDAre was 5.1X as of Jun 30, 2023.
Dividend Update
Concurrent with its second-quarter earnings release, Healthpeak’s board of directors announced a quarterly cash dividend of 30 cents per common share. The dividend will be paid out on Aug 18 to shareholders on record as of Aug 7, 2023.
2023 Guidance Revised
Healthpeak revised its guidance for 2023 FFO as adjusted per share to the range of $1.73–$1.77 from $1.71–$1.77 guided earlier. The Zacks Consensus Estimate for the same is currently pegged at $1.73, which lies within the guided range.
The same-store total portfolio cash-adjusted NOI growth for the total portfolio was revised upward to 3.25-4.75% from 3.00-4.50% estimated earlier.
Healthpeak currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Healthpeak Properties, Inc. Price, Consensus and EPS Surprise
Healthpeak Properties, Inc. price-consensus-eps-surprise-chart | Healthpeak Properties, Inc. Quote
Performance of Other REITs
Prologis, Inc. (PLD - Free Report) reported second-quarter 2023 core FFO per share of $1.83, beating the Zacks Consensus Estimate of $1.68. The figure also compared favorably with the year-ago quarter’s figure of $1.11.
Results of this industrial REIT, which announced the acquisition of industrial properties from opportunistic real estate funds affiliated with Blackstone worth $3.1 billion in June, reflected robust leasing activity and solid rent growth. Prologis also raised the midpoint of its 2023 core FFO per share guidance.
Crown Castle Inc. (CCI - Free Report) reported second-quarter 2023 AFFO per share of $2.05, outpacing the Zacks Consensus Estimate of $1.99. The reported figure climbed 13.9% from the year-ago quarter’s tally of $1.80.
The results reflected better-than-anticipated revenues aided by robust site-rental revenue growth. However, CCI lowered its outlook for 2023, citing that it expects a decline in tower activity for the remainder of the year due to reduced network spending by wireless carriers.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported second-quarter 2023 AFFO per share of $2.24, surpassing the Zacks Consensus Estimate of $2.20. The reported figure climbed 6.7% from the year-ago quarter’s tally.
ARE’s results reflected better-than-expected revenues on healthy leasing activity and solid rental rate growth.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.