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Healthpeak Properties, Inc. reported fourth-quarter 2019 funds from operations (FFO) as adjusted of 44 cents per share, in line with the Zacks Consensus Estimate. This compares favorably with FFO as adjusted in the prior-year quarter of 43 cents per share.
The healthcare real estate investment trust (REIT) generated revenues of $531.7 million, lagging the Zacks Consensus Estimate of $540.8 million. However, the figure was higher than the year-ago number of $441.9 million.
Results were supported by decent performance of almost all segments.
For 2019, FFO as adjusted was $1.76 per share, in line with the Zacks Consensus Estimate. The figure was below the prior year’s FFO as adjusted of $1.82 per share. Revenues were nearly $2 billion, up from $1.8 billion recorded a year ago. The figure was in line with the Zacks Consensus Estimate.
Behind the Headlines
Healthpeak witnessed a 3.6% year-over-year rise in the three-month cash SPP net operating income (NOI). It registered 5.3% growth in life-science cash NOI, 2.7% rise in the medical office segment, 2.7% advancement in other non-reportable segments and 3.3% rise in senior-housing segment cash NOI.
Healthpeak had cash and cash equivalents of $144.2 million as of Dec 31, 2019, up from $110.8 million recorded at the end of 2018.
Notable Portfolio Activities in December
Healthpeak closed the acquisition of the 224,000-square-foot LEED Gold laboratory building located at 35 CambridgePark Drive for $332.5 million. The transaction will likely expand the company’s footprint in the Boston life-science market.
Also, it announced the addition of The Boardwalk, a $164-million, 190,000-square-feet life science project to its development pipeline. The Boardwalk is located at Science Center Drive in the Torrey Pines life science cluster in San Diego. Occupancy at The Boardwalk is expected in the second quarter of 2021.
The company also announced a lease amendment and extension program with Amgen at Healthpeak's Britannia Oyster Point campus in South San Francisco.
Further, Healthpeak entered into an agreement with Oakmont, which provides it with the option of acquiring up to 24 of Oakmont's senior housing development properties upon stabilization, which are concentrated in California and have a projected value of nearly $1.3 billion.
Healthpeak also completed the sale of its remaining 49% interest in its U.K. holdings to Omega Healthcare Investors for $91 million.
Outlook
The company provided 2020 FFO as adjusted guidance range of $1.77-$1.83 per share. The Zacks Consensus Estimate for the same is pegged at $1.81.
Moreover, the company expects 2020 SPP cash NOI growth for the total portfolio of 2-3%.
Conclusion
Healthpeak’s fourth-quarter performance was encouraging. The company is continuously undertaking strategic efforts to strengthen its core segments on acquisitions and portfolio quality-enhancing transactions. With ample liquidity and improved financial flexibility, it is well-poised to pursue growth opportunities. However, lackluster senior housing fundamentals and rise in new supply are likely to hurt the company’s pricing power and occupancy level.
Healthpeak Properties, Inc. Price, Consensus and EPS Surprise
Performance & Earnings Release Schedule of Other REITs
Highwoods Properties Inc.’s (HIW - Free Report) fourth-quarter 2019 FFO per share of 91 cents surpassed the Zacks Consensus Estimate of 90 cents. The figure also improved from 86 cents reported in the year-ago period.
Boston Properties Inc.’s (BXP - Free Report) fourth-quarter 2019 FFO per share of $1.87 surpassed the Zacks Consensus Estimate of $1.85. The reported figure also increased 17.6% from $1.59 reported in the year-ago quarter.
Ventas, Inc. (VTR - Free Report) will report results in a few days.
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 (PEAK) Q4 FFO Meets Estimates, Revenues Rise Y/Y
Healthpeak Properties, Inc. reported fourth-quarter 2019 funds from operations (FFO) as adjusted of 44 cents per share, in line with the Zacks Consensus Estimate. This compares favorably with FFO as adjusted in the prior-year quarter of 43 cents per share.
The healthcare real estate investment trust (REIT) generated revenues of $531.7 million, lagging the Zacks Consensus Estimate of $540.8 million. However, the figure was higher than the year-ago number of $441.9 million.
Results were supported by decent performance of almost all segments.
For 2019, FFO as adjusted was $1.76 per share, in line with the Zacks Consensus Estimate. The figure was below the prior year’s FFO as adjusted of $1.82 per share. Revenues were nearly $2 billion, up from $1.8 billion recorded a year ago. The figure was in line with the Zacks Consensus Estimate.
Behind the Headlines
Healthpeak witnessed a 3.6% year-over-year rise in the three-month cash SPP net operating income (NOI). It registered 5.3% growth in life-science cash NOI, 2.7% rise in the medical office segment, 2.7% advancement in other non-reportable segments and 3.3% rise in senior-housing segment cash NOI.
Healthpeak had cash and cash equivalents of $144.2 million as of Dec 31, 2019, up from $110.8 million recorded at the end of 2018.
Notable Portfolio Activities in December
Healthpeak closed the acquisition of the 224,000-square-foot LEED Gold laboratory building located at 35 CambridgePark Drive for $332.5 million. The transaction will likely expand the company’s footprint in the Boston life-science market.
Also, it announced the addition of The Boardwalk, a $164-million, 190,000-square-feet life science project to its development pipeline. The Boardwalk is located at Science Center Drive in the Torrey Pines life science cluster in San Diego. Occupancy at The Boardwalk is expected in the second quarter of 2021.
The company also announced a lease amendment and extension program with Amgen at Healthpeak's Britannia Oyster Point campus in South San Francisco.
Further, Healthpeak entered into an agreement with Oakmont, which provides it with the option of acquiring up to 24 of Oakmont's senior housing development properties upon stabilization, which are concentrated in California and have a projected value of nearly $1.3 billion.
Healthpeak also completed the sale of its remaining 49% interest in its U.K. holdings to Omega Healthcare Investors for $91 million.
Outlook
The company provided 2020 FFO as adjusted guidance range of $1.77-$1.83 per share. The Zacks Consensus Estimate for the same is pegged at $1.81.
Moreover, the company expects 2020 SPP cash NOI growth for the total portfolio of 2-3%.
Conclusion
Healthpeak’s fourth-quarter performance was encouraging. The company is continuously undertaking strategic efforts to strengthen its core segments on acquisitions and portfolio quality-enhancing transactions. With ample liquidity and improved financial flexibility, it is well-poised to pursue growth opportunities. However, lackluster senior housing fundamentals and rise in new supply are likely to hurt the company’s pricing power and occupancy level.
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 & Earnings Release Schedule of Other REITs
Highwoods Properties Inc.’s (HIW - Free Report) fourth-quarter 2019 FFO per share of 91 cents surpassed the Zacks Consensus Estimate of 90 cents. The figure also improved from 86 cents reported in the year-ago period.
Boston Properties Inc.’s (BXP - Free Report) fourth-quarter 2019 FFO per share of $1.87 surpassed the Zacks Consensus Estimate of $1.85. The reported figure also increased 17.6% from $1.59 reported in the year-ago quarter.
Ventas, Inc. (VTR - Free Report) will report results in a few days.
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.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>