Healthpeak's (PEAK) Q1 FFO Meets Estimates, Revenues Beat
Healthpeak Properties, Inc. PEAK reported first-quarter 2023 funds from operations (FFO) as adjusted per share of 42 cents, in line with the Zacks Consensus Estimate. The reported figure, however, fell short of the year-ago quarter’s 43 cents.
Results reflect better-than-anticipated revenues. Moreover, improvement in same-store portfolio cash (adjusted) net operating income (NOI) was witnessed across the portfolio. The company reaffirmed its 2023 outlook for FFO as adjusted per share.
The healthcare real estate investment trust (REIT) generated revenues of $525.7 million, outpacing the Zacks Consensus Estimate of $516.8 million and our estimate of $515.9 million. Moreover, the figure was 5.5% higher than the prior-year quarter’s $498.4 million.
On Feb 10, 2023, Healthpeak announced the completion of its holding company reorganization, which restructured the company as an Umbrella Partnership Real Estate Investment Trust (UPREIT).
Behind the Headlines
In the first quarter, Healthpeak reported 5.5% year-over-year growth in the same-store portfolio cash-adjusted NOI.
It witnessed 6.3% and 3.7% 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 9.5% from the prior-year quarter.
Portfolio Activity
During the reported quarter, Healthpeak executed life science new and renewal leases totaling 311,000 square feet with cash-releasing spreads on renewals of 55%.
The company placed in-service the remaining 19,000 square feet of 101 Cambridge Park Drive in Cambridge, MA. This represented an investment of $28 million. The property spans roughly 161,000 square feet and the purpose-built lab space was 100% leased.
PEAK and its joint venture partner disposed of a non-core medical office building in Tampa MSA for $32 million during the first quarter. The company’s share of the sales price was $16 million.
Balance Sheet
Healthpeak exited first-quarter 2023 with cash and cash equivalents of $59.2 million, down from $72 million as of Dec 31, 2022. Its net debt to adjusted EBITDAre was 5.4X as of Mar 31, 2023.
Dividend Update
Concurrent with its first-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 May 19 to shareholders on record as of May 8, 2023.
2023 Guidance
Healthpeak reaffirmed its guidance for 2023 FFO as adjusted per share between $1.70 and $1.76. The Zacks Consensus Estimate for the same is currently pegged at $1.73, which lies within the guided range.
The same-store portfolio cash-adjusted NOI growth for the total portfolio was revised upward from 2.75-4.25% to 3-4.5%.
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
Mid-America Apartment Communities, Inc. MAA, commonly referred to as MAA, reported first-quarter 2023 core FFO per share of $2.28, surpassing the Zacks Consensus Estimate of $2.25. Moreover, the reported figure climbed 15.7% 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 also raised its outlook for 2023 core FFO per share.
Alexandria Real Estate Equities, Inc. ARE reported first-quarter 2023 AFFO per share of $2.19, surpassing the Zacks Consensus Estimate of $2.15. The reported figure climbed 6.8% from the year-ago quarter’s tally. We estimated AFFO per share for the quarter to be $2.14.
ARE’s results reflected better-than-anticipated revenues on healthy leasing activity and solid rental rate growth.
Boston Properties Inc.’s BXP first-quarter 2023 FFO per share of $1.73 outpaced the Zacks Consensus Estimate of $1.70. It also surpassed our estimate of $1.68. However, the reported figure fell 4.9% year over year.
BXP’s quarterly results reflect better-than-anticipated revenues on healthy leasing activity. However, the company noted that higher interest expenses during the quarter marred its year-over-year FFO per share growth. BXP raised its outlook for 2023 FFO per share.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.
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