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Healthpeak (PEAK) Q3 FFO Meets, Revenues Beat, View Revised

Healthpeak Properties, Inc. PEAK reported third-quarter 2022 funds from operations (FFO) as adjusted per share of 43 cents, in line with the Zacks Consensus Estimate. The reported figure was up 7.5% from the year-ago quarter’s 40 cents.

The performance was backed by healthy top-line growth. Moreover, improvement in same-store portfolio cash (adjusted) net operating income (NOI) was witnessed across the portfolio. The company revised its 2022 outlook.

The healthcare real estate investment trust (REIT) generated revenues of $520.4 million, outpacing the Zacks Consensus Estimate of $518.4 million. The figure was 8.1% higher than the prior-year quarter’s $481.5 million.

Behind the Headlines

In the September quarter, Healthpeak reported 5.1% year-over-year growth in the same-store portfolio cash adjusted NOI.

It witnessed 5.4% and 4.9% year-over-year growth in the same-store portfolio cash (adjusted) NOI for its life-science and medical office segments, respectively. Also, the same-store portfolio cash adjusted NOI for the CCRC portfolio improved 4.1% from the prior-year quarter.

Portfolio Activity

During the reported quarter, Healthpeak executed life science leases totaling more than 500,000 square feet.

The company placed in service the remaining 36,000 square feet at Phase II of The Shore, in Brisbane, CA. This represented an investment of $49 million. The 23-acre waterfront campus encompassing around 629,000 square feet is 100% leased to leading global pharmaceutical and biotech companies.

PEAK also disposed of two non-core MOB assets, which generated proceeds of $9 million.

Balance Sheet

Healthpeak exited third-quarter 2022 with cash and cash equivalents of $112.5 million, up from $73.01 million as of Jun 30, 2022.

As of Sep 30, 2022, it had $2.4 billion of liquidity, which included the net proceeds from the future settlement of shares sold under equity forward contracts during the third quarter of 2021. Its net debt to adjusted EBITDAre was 5.3X as of the same date.

Share Repurchase Program

In August 2022, Healthpeak's board of directors approved a share repurchase program. Under this, the company may purchase up to $500 million of common stock in the open market at its discretion and as market conditions warrant until August 2024.

In the same month, PEAK repurchased $56 million of common stock at a weighted average price of $27.16 per share.

2022 Outlook Revised

Healthpeak revised its guidance for 2022.

It expects FFO as adjusted per share to lie between $1.72 and $1.74, revised upward from $1.68 and $1.74 estimated earlier. The Zacks Consensus Estimate for the same is currently pegged at $1.73, which lies in the guided range.

The same-store portfolio cash-adjusted NOI growth for the total portfolio was revised upward from 3.5-5% to 4.5-5.5%.

Healthpeak currently carries a Zacks Rank #2 (Buy). 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

Mid-America Apartment Communities, Inc. MAA, commonly referred to as MAA, reported third-quarter 2022 core FFO per share of $2.19, surpassing the Zacks Consensus Estimate of $2.09. The reported number improved by 23% year over year.

This residential REIT’s quarterly results were driven by an increase in the average effective rent per unit for the same-store portfolio. MAA increased its outlook for core FFO growth for the year.

Alexandria Real Estate Equities, Inc. ARE reported third-quarter 2022 adjusted FFO per share of $2.13, surpassing the Zacks Consensus Estimate by a cent. The reported figure also compared favorably with the year-ago quarter’s $1.95.

ARE’s results reflect decent leasing activity and rental rate growth during the quarter. Year-over-year improvement in the top line was noticeable.

Boston Properties Inc.’s BXP third-quarter 2022 FFO per share of $1.91 outpaced the Zacks Consensus Estimate of $1.87. The figure increased 10.4% year over year.

BXP’s quarterly results reflect healthy leasing activity alongside year-over-year growth in the top line. It also carried out strategic acquisitions, redevelopments and dispositions during the quarter. The company revised its 2022 outlook for FFO.

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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