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

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

Performance was supported by healthy top line growth. In addition, an improvement in same store portfolio NOI (adjusted) was seen across the portfolio. The company has revised its outlook for 2022.

The healthcare real estate investment trust (REIT) generated revenue of $520.4 million, beating Zacks’ consensus estimate of $518.4 million. This figure was 8.1% higher than the $481.5 million in the prior year quarter.

Behind the headlines

During the September quarter, Healthpeak reported 5.1% year-over-year growth in same-store portfolio cash-adjusted net sales.

It delivered 5.4% and 4.9% year-over-year growth in same-store portfolio cash NOI (adjusted) for its life science and medical practice segments, respectively . Additionally, same-store portfolio cash-adjusted NOI for the CCRC portfolio improved 4.1% compared to the prior year quarter.

Portfolio activity

During the reported quarter, Healthpeak executed life sciences leases totaling over 500,000 square feet.

The company has commissioned the remaining 36,000 square feet of Phase II of The Shore, Brisbane, California. This represents an investment of $49 million. The 23-acre waterfront campus covering approximately 629,000 square feet is 100% leased to leading global pharmaceutical and biotechnology companies.

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

Balance sheet

Healthpeak ended the third quarter of 2022 with cash and cash equivalents of $112.5 million, compared to $73.01 million as of June 30, 2022.

As of September 30, 2022, it had $2.4 billion in cash, which included net proceeds from future settlement of shares sold under equity futures contracts during the third quarter of 2021. Its net debt per to adjusted EBITDA was 5.3X at the same date. Date.

Share buyback program

In August 2022, Healthpeak’s Board of Directors approved a share buyback program. Under this, the company can purchase up to $500 million of common stock on the open market at its discretion and on market terms through August 2024.

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

Revised 2022 outlook

Healthpeak has revised its forecast for 2022.

He expects adjusted FFO per share to be between $1.72 and $1.74, revised up from the previously estimated $1.68 and $1.74. The Zacks consensus estimate for the same is currently pegged at $1.73, which sits within the guided range.

Same-store portfolio cash-adjusted NOI growth for the entire portfolio has been revised upward from 3.5-5% to 4.5-5.5%.

Healthpeak currently carries a Zacks Rank #2 (Buy). You can see the full 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 | Quote from Healthpeak Properties, Inc.

Performance of other REITs

Mid-America Apartment Communities, Inc. MAA, commonly referred to as MAA, reported a basic FFO per share of $2.19 in Q3 2022, beating Zacks’ consensus estimate of $2.09. The reported number improved 23% year over year.

The quarterly results of this residential REIT are attributable to an increase in the average effective rent per unit for the portfolio of comparable stores. MAA raised its core FFO growth outlook for the year.

Alexandria Real Estate Equities, Inc. ARE reported adjusted FFO per share of $2.13 in Q3 2022, beating Zacks’ consensus estimate by one cent. The reported figure also compares favorably to the $1.95 in the prior year quarter.

ARE’s results reflect decent rental activity and growth in rental rates during the quarter. The year-over-year improvement in revenue was notable.

Properties of Boston Inc.The BXP Q3 2022 FFO per share of $1.91 topped the Zacks consensus estimate of $1.87. This figure increased by 10.4% year over year.

BXP’s quarterly results reflect healthy leasing activity as well as year-over-year revenue growth. It also made strategic acquisitions, redevelopments and divestitures during the quarter. The company has revised its 2022 outlook for FFOs.

Note: Everything related to earnings presented in this description represents funds from operations (FFO) – a metric widely used to assess the performance of REITs.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Carol N. Valencia