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Healthpeak (PEAK) Issues Business Update on Coronavirus Scare
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Healthpeak Properties recently issued an update on three of the company’s core business segments, along with its balance sheet and liquidity profile, in light of the coronavirus pandemic. The number of infected patients in the United States is skyrocketing and Healthpeak’s portfolio has not been spared as well.
In its senior housing portfolio, across 222 communities, the company presently has 22 communities managed by nine different operators with confirmed resident COVID-19 cases, based on its operators’ reports. Also, 11 of those affected communities have reported resident deaths.
With respect to the senior housing operating portfolio, which generates 34% of the company’s net operating income (NOI), it noted that total blended occupancy in the SHOP and CCRC portfolios of 83.4% on Mar 31 declined from 83.7% on Mar 15 and 83.8% on Feb 29. There is a decline in move-ins in light of COVID-19 protocols, sheltering in place, and reduced in-person tours. Particularly, move-ins in the SHOP and CCRC portfolios in March declined 41% from February 2020 and 50% from March 2019.
As such, occupancy and rental income will be directly affected due to reduced move-in activity as well as natural attrition driven by ‘average length of stay’ of residents. Also, operations and medical-supply expenses will flare up depending on the penetration and duration of this pandemic. As such, for the senior housing segment, during the pandemic impact period, the company expects total costs to be 5-15% higher than the company’s original 2020 annual plan.
Considering its medical office portfolio, which generates 29% of the company’s NOI, the company noted that it has received rent relief requests from many of its physician tenants as non-essential surgeries and procedures have been discontinued by many of them. The company is implementing a deferred rent program for its non-health system/hospital tenants subject to certain conditions. Nevertheless, with planned tenant move-outs likely to be postponed, retention might increase during the pandemic.
In the Life Science Portfolio, which accounts for 31% of NOI, the company has received a limited number of rent deferral requests. It also expects a slowdown in leasing activity during the pandemic period.
However, on Apr 1, the company closed on the previously-announced $320-million acquisition of The Post, which is a 426,000-square-foot life-science and innovation asset in the Route 128 submarket of Boston. The move strengthens the company’s life-science assets in the Boston region. The company has also executed 314,000 square feet of leasing in the first quarter, of which 40% was executed in March.
Nevertheless, the company has been taking steps to bolster its liquidity. As of Mar 31, 2020, and pro forma for the acquisition of The Post, the company had no outstanding balances under its revolver and more than $450-million cash balance. This offers the company roughly $3 billion of liquidity.
The company completed acceleration of all equity forward settlements for $1,062 million. Further, it has closed on $127 million of dispositions to date, and anticipates completing approximately $125 million of additional medical office dispositions in 2020.
Therefore, though the coronavirus pandemic has been wreaking havoc all over, Healthpeak, with its sound liquidity position and diversified portfolio, is anticipated to sail through these uncertain times.
SBA Communications Corporation’s (SBAC - Free Report) FFO per share estimate for the ongoing year moved 1.4% north to $9.37 over the past two months. The stock currently carries a Zacks Rank #2 (Buy).
Gladstone Land Corp’s (LAND - Free Report) FFO per share estimate for the current year climbed 3.33% to 62 cents in the past month. The stock currently carries a Zacks Rank #2.
Plymouth Industrial REIT’s (PLYM - Free Report) Zacks Consensus Estimate for 2020 FFO per share moved up about 2% to $2.08 over the past two months. The stock currently holds a Zacks Rank of 2.
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.
Free: Zacks’ Single Best Stock Set to Double
Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
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Healthpeak (PEAK) Issues Business Update on Coronavirus Scare
Healthpeak Properties recently issued an update on three of the company’s core business segments, along with its balance sheet and liquidity profile, in light of the coronavirus pandemic. The number of infected patients in the United States is skyrocketing and Healthpeak’s portfolio has not been spared as well.
In its senior housing portfolio, across 222 communities, the company presently has 22 communities managed by nine different operators with confirmed resident COVID-19 cases, based on its operators’ reports. Also, 11 of those affected communities have reported resident deaths.
With respect to the senior housing operating portfolio, which generates 34% of the company’s net operating income (NOI), it noted that total blended occupancy in the SHOP and CCRC portfolios of 83.4% on Mar 31 declined from 83.7% on Mar 15 and 83.8% on Feb 29. There is a decline in move-ins in light of COVID-19 protocols, sheltering in place, and reduced in-person tours. Particularly, move-ins in the SHOP and CCRC portfolios in March declined 41% from February 2020 and 50% from March 2019.
As such, occupancy and rental income will be directly affected due to reduced move-in activity as well as natural attrition driven by ‘average length of stay’ of residents. Also, operations and medical-supply expenses will flare up depending on the penetration and duration of this pandemic. As such, for the senior housing segment, during the pandemic impact period, the company expects total costs to be 5-15% higher than the company’s original 2020 annual plan.
Considering its medical office portfolio, which generates 29% of the company’s NOI, the company noted that it has received rent relief requests from many of its physician tenants as non-essential surgeries and procedures have been discontinued by many of them. The company is implementing a deferred rent program for its non-health system/hospital tenants subject to certain conditions. Nevertheless, with planned tenant move-outs likely to be postponed, retention might increase during the pandemic.
In the Life Science Portfolio, which accounts for 31% of NOI, the company has received a limited number of rent deferral requests. It also expects a slowdown in leasing activity during the pandemic period.
However, on Apr 1, the company closed on the previously-announced $320-million acquisition of The Post, which is a 426,000-square-foot life-science and innovation asset in the Route 128 submarket of Boston. The move strengthens the company’s life-science assets in the Boston region. The company has also executed 314,000 square feet of leasing in the first quarter, of which 40% was executed in March.
Nevertheless, the company has been taking steps to bolster its liquidity. As of Mar 31, 2020, and pro forma for the acquisition of The Post, the company had no outstanding balances under its revolver and more than $450-million cash balance. This offers the company roughly $3 billion of liquidity.
The company completed acceleration of all equity forward settlements for $1,062 million. Further, it has closed on $127 million of dispositions to date, and anticipates completing approximately $125 million of additional medical office dispositions in 2020.
Therefore, though the coronavirus pandemic has been wreaking havoc all over, Healthpeak, with its sound liquidity position and diversified portfolio, is anticipated to sail through these uncertain times.
Shares of this Zacks Rank #3 (Hold) company have depreciated 30.6% so far this year, while its industry has declined 19.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
SBA Communications Corporation’s (SBAC - Free Report) FFO per share estimate for the ongoing year moved 1.4% north to $9.37 over the past two months. The stock currently carries a Zacks Rank #2 (Buy).
Gladstone Land Corp’s (LAND - Free Report) FFO per share estimate for the current year climbed 3.33% to 62 cents in the past month. The stock currently carries a Zacks Rank #2.
Plymouth Industrial REIT’s (PLYM - Free Report) Zacks Consensus Estimate for 2020 FFO per share moved up about 2% to $2.08 over the past two months. The stock currently holds a Zacks Rank of 2.
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.
Free: Zacks’ Single Best Stock Set to Double
Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
See 5 Stocks Set to Double>>