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Healthpeak Properties, Inc. reported third-quarter 2023 funds from operations (FFO) as adjusted per share of 45 cents, beating the Zacks Consensus Estimate by a whisker. The reported figure rose 4.6% from the prior-year quarter.
Results reflect better-than-anticipated revenues. Moreover, growth in same-store portfolio cash (adjusted) net operating income (NOI) was witnessed across the portfolio. The company raised its outlook for the current year.
The healthcare real estate investment trust (REIT) generated revenues of $556.24 million, outpacing the Zacks Consensus Estimate of $543.04 million. Moreover, the figure climbed 6.9% year over year.
Behind the Headlines
In the third quarter, Healthpeak reported 6% year-over-year growth in the total same-store portfolio cash (adjusted) NOI, surpassing our estimate of 4.4%.
It witnessed 3.3% and 3.4% year-over-year growth in the same-store portfolio cash (adjusted) NOI for its lab and outpatient medical segments, respectively. The CCRC segment reported growth of 32.1%. We had projected same-store portfolio cash (adjusted) NOI growth for the lab, outpatient medical and CCRC segments to be 2.6%, 2.9% and 18%, respectively.
During the reported quarter, Healthpeak executed lab new and renewal leases totaling 211,000 square feet, which included leases at three trophy campuses. For the outpatient medical portfolio, new and renewal leases aggregated 2.1 million square feet, marking an all-time quarterly high. The figure includes 1.3 million square feet renewal at Medical City Dallas.
Balance Sheet
Healthpeak exited the third quarter with cash and cash equivalents of $63.5 million, down from $103.8 million as of Jun 30, 2023. Its net debt to adjusted EBITDAre was 5.2X as of Sep 30, 2023.
Dividend Update
Concurrent with its third-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 Nov 20 to shareholders on record as of Nov 7, 2023.
2023 Guidance Up
Healthpeak raised its guidance for 2023 FFO as adjusted per share to the range of $1.76–$1.78 from $1.73–$1.77 estimated earlier, implying a 2-cent increase at the midpoint. The Zacks Consensus Estimate for the same is currently pegged at $1.76, which lies within expectations.
The total portfolio same-store cash-adjusted NOI growth was revised upward to 4.25-5.25% from 3.25-4.75% projected earlier. This suggests a 75-basis point increase at the midpoint.
Prologis, Inc. (PLD - Free Report) reported third-quarter 2023 core FFO per share of $1.30, beating the Zacks Consensus Estimate of $1.26. The figure, however, declined 24.9% from the year-ago quarter.
The results of this industrial REIT reflect healthy rent growth. However, lower occupancy and higher interest expenses were undermining factors. PLD also raised the midpoint of its 2023 core FFO per share guidance by a cent.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported third-quarter 2023 adjusted FFO (AFFO) per share of $2.26, surpassing the Zacks Consensus Estimate of $2.24. The reported figure climbed 6.1% from the year-ago quarter.
Results reflected year-over-year revenue growth, aided by decent leasing activity and solid rental rate growth. ARE also increased the midpoint of its 2023 AFFO per share outlook by 2 cents.
Equinix Inc.’s (EQIX - Free Report) third-quarter 2023 AFFO per share of $8.19 surpassed the Zacks Consensus Estimate of $7.79. The figure improved nearly 6% from the prior-year quarter.
EQIX’s results reflected steady growth in colocation and inter-connection revenues as enterprises and service providers look to integrate artificial intelligence into their strategies and offerings. During the quarter, Equinix’s total interconnections reached 460,500, rising 1% sequentially and 4% year over year. The company also raised its AFFO per share guidance for 2023.
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's (PEAK) Q3 FFO & Revenues Top, '23 View Raised
Healthpeak Properties, Inc. reported third-quarter 2023 funds from operations (FFO) as adjusted per share of 45 cents, beating the Zacks Consensus Estimate by a whisker. The reported figure rose 4.6% from the prior-year quarter.
Results reflect better-than-anticipated revenues. Moreover, growth in same-store portfolio cash (adjusted) net operating income (NOI) was witnessed across the portfolio. The company raised its outlook for the current year.
The healthcare real estate investment trust (REIT) generated revenues of $556.24 million, outpacing the Zacks Consensus Estimate of $543.04 million. Moreover, the figure climbed 6.9% year over year.
Behind the Headlines
In the third quarter, Healthpeak reported 6% year-over-year growth in the total same-store portfolio cash (adjusted) NOI, surpassing our estimate of 4.4%.
It witnessed 3.3% and 3.4% year-over-year growth in the same-store portfolio cash (adjusted) NOI for its lab and outpatient medical segments, respectively. The CCRC segment reported growth of 32.1%. We had projected same-store portfolio cash (adjusted) NOI growth for the lab, outpatient medical and CCRC segments to be 2.6%, 2.9% and 18%, respectively.
During the reported quarter, Healthpeak executed lab new and renewal leases totaling 211,000 square feet, which included leases at three trophy campuses. For the outpatient medical portfolio, new and renewal leases aggregated 2.1 million square feet, marking an all-time quarterly high. The figure includes 1.3 million square feet renewal at Medical City Dallas.
Balance Sheet
Healthpeak exited the third quarter with cash and cash equivalents of $63.5 million, down from $103.8 million as of Jun 30, 2023. Its net debt to adjusted EBITDAre was 5.2X as of Sep 30, 2023.
Dividend Update
Concurrent with its third-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 Nov 20 to shareholders on record as of Nov 7, 2023.
2023 Guidance Up
Healthpeak raised its guidance for 2023 FFO as adjusted per share to the range of $1.76–$1.78 from $1.73–$1.77 estimated earlier, implying a 2-cent increase at the midpoint. The Zacks Consensus Estimate for the same is currently pegged at $1.76, which lies within expectations.
The total portfolio same-store cash-adjusted NOI growth was revised upward to 4.25-5.25% from 3.25-4.75% projected earlier. This suggests a 75-basis point increase at the midpoint.
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 third-quarter 2023 core FFO per share of $1.30, beating the Zacks Consensus Estimate of $1.26. The figure, however, declined 24.9% from the year-ago quarter.
The results of this industrial REIT reflect healthy rent growth. However, lower occupancy and higher interest expenses were undermining factors. PLD also raised the midpoint of its 2023 core FFO per share guidance by a cent.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported third-quarter 2023 adjusted FFO (AFFO) per share of $2.26, surpassing the Zacks Consensus Estimate of $2.24. The reported figure climbed 6.1% from the year-ago quarter.
Results reflected year-over-year revenue growth, aided by decent leasing activity and solid rental rate growth. ARE also increased the midpoint of its 2023 AFFO per share outlook by 2 cents.
Equinix Inc.’s (EQIX - Free Report) third-quarter 2023 AFFO per share of $8.19 surpassed the Zacks Consensus Estimate of $7.79. The figure improved nearly 6% from the prior-year quarter.
EQIX’s results reflected steady growth in colocation and inter-connection revenues as enterprises and service providers look to integrate artificial intelligence into their strategies and offerings. During the quarter, Equinix’s total interconnections reached 460,500, rising 1% sequentially and 4% year over year. The company also raised its AFFO per share guidance for 2023.
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.