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Healthpeak (PEAK) Q1 FFO Surpasses Estimates, Revenues Miss

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Healthpeak Properties, Inc. PEAK reported first-quarter 2021 funds from operations (“FFO”) as adjusted of 40 cents per share, surpassing the Zacks Consensus Estimate by a whisker. However, the reported figure compared unfavorably with FFO as adjusted of 45 cents per share recorded in the prior-year quarter.

The healthcare real estate investment trust (“REIT”) generated revenues of $455.3 million, missing the Zacks Consensus Estimate of $544.9 million. Nonetheless, the figure was 19.5% higher than the year-ago number.

Performance was backed by revenue growth. However, weakness in the continuing care retirement communities (CCRC) portfolio affected results.

Behind the Headlines

For first-quarter 2021, the company registered 4.3% growth in the three-month cash same-store portfolio net operating income (NOI), including government grants received under the CARES Act.

It witnessed 8.5% and 2.1% year-over-year growth in the three-month cash same-store portfolio NOI for its life-science segment and the medical office segment, respectively. However, three-month cash same-store portfolio NOI for the CCRC portfolio declined 16.5% year over year, including government grants received under the CARES Act.

Portfolio Activity

In the first quarter, the company closed the buyout of a 14-property medical office portfolio, spanning 833,000 square feet, for $371 million.

Healthpeak earlier initiated a strategy to dispose of its senior housing triple-net and SHOP assets worth $4 billion. Making significant progress on the strategy, it aggregated gross proceeds of $3.5 billion from closed dispositions since July 2020.

Liquidity

Healthpeak had cash and cash equivalents of $34 million as of Mar 31, 2021, down from $44.2 million recorded at the end of 2020.

On May 4, the company used proceeds from its senior housing sales to commence tender offers of up to an additional $550 million of senior unsecured notes maturing in 2025 that have a weighted average coupon of 3.7%.

Pro forma debt repayment, the company has no senior unsecured notes maturing until February 2025, thereby, extending weighted average debt maturity to 6.5 years. Further, weighted average interest rate has been reduced to 3%.

Dividend Update

On Apr 29, the company announced a quarterly cash dividend of 30 cents per common share. The dividend will be paid out on May 21 to shareholders of record as of May 10, 2021.

Outlook

The company updated the guidance for 2021 and expects FFO as adjusted per share of $1.53-$1.61 compared with $1.50-$1.60 mentioned earlier. The Zacks Consensus Estimate for the same is pegged at $1.58.

Same-store cash adjusted NOI growth for 2021 is expected to be 1.75-3.25% for the total portfolio.

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 and EPS Surprise
Healthpeak Properties, Inc. Price, Consensus and EPS Surprise

Healthpeak Properties, Inc. price-consensus-eps-surprise-chart | Healthpeak Properties, Inc. Quote

Performance of Other REITs

PS Business Parks, Inc. PSB reported first-quarter 2021 core FFO per share of $1.67, in line with the Zacks Consensus Estimate. However, the reported figure decreased 2.9% year over year.

Boston Properties Inc.’s BXP first-quarter 2021 FFO per share of $1.56 beat the Zacks Consensus Estimate of $1.55. The quarterly figure also surpassed the mid-point of the company’s guidance by a cent, highlighting better-than-projected portfolio performance and higher fee income.

Highwoods Properties, Inc.’s HIW first-quarter 2021 FFO per share of 91 cents surpassed the Zacks Consensus Estimate of 87 cents. However, FFO per share declined 2.2% from 91 cents recorded in the year-ago period.

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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