Healthpeak Properties Says Sales, Recapitalizations Could Generate $1B-Plus In Proceeds
Medical office assets are once again showcasing their strength after one of the largest healthcare REITs in the country shared better-than-expected earnings.
Denver-based Healthpeak Properties, bolstered by strong demand in outpatient medical, posted earnings of $705.9M, according to a press release. The revenue was up from $678.5M in the second quarter and $700.4M in the same quarter last year.
Those figures slightly exceeded Wall Street expectations, according to Seeking Alpha.
The REIT said it was optimistic for the future of outpatient medical buildings as values have strengthened and as the company is in various stages of deals that could generate roughly $1B in proceeds.
Healthpeak was under contract for four fully stabilized, 100% occupied outpatient medical buildings totaling $136M, according to the REIT. That sale is expected to close in the fourth quarter.
The REIT sold off two outpatient medical office buildings for a combined total of $31M. It also plans to sell its interest in a ground lease for a four-building, 239K SF lab campus in Salt Lake City for $68M. The sale is expected to close in January.
Leasing activity increased 3% in the third quarter, according to the company. Total occupancy was up 10 basis points.
The company saw growth in its continuing care retirement community portfolio, with operating income increasing more than 50% since 2019. In total, Healthpeak recorded 1.5M SF of new leases and renewals in the third quarter.
Healthpeak executed 1.2M SF in outpatient medical leases, rising 70 basis points sequentially. Healthpeak also reported new and renewed lab leases totaling 339K SF in the third quarter.
The company is optimistic about its lab portfolio in the long term, anticipating recovery over the next two years.
In July, Healthpeak unveiled plans for a $4.5B mixed-use development in Cambridge, Massachusetts, which would include 1.3M SF of lab space. The developer is working in partnership with Hines.
"We believe there has been a palpable shift in sentiment across the biopharma sector since the start of the school year driven by M&A activity, clinical data readouts, lower interest rates, reduced regulatory uncertainty, and biopharma stock price performance," the company said in the press release.
However, Healthpeak recorded a net income loss of 17 cents per share. Shares dipped 2.3% in Thursday after-hours trading, showing signs of investor concerns, according to Seeking Alpha.
