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Multibillion-dollar life sciences developer Healthpeak Properties has announced a sudden change in leadership.
The Denver-based REIT with nearly $13B in life sciences and medical office real estate assets announced on Thursday that CEO and board of directors member Tom Herzog had stepped down from both positions, effective immediately. The departure was a mutual agreement so Herzog can pursue other endeavors, Healthpeak's announcement stated. He had served as CEO since January 2017.
In its Securities and Exchange Commission filing announcing the leadership change, Healthpeak stated that Herzog's exit was not based on any disagreement over company matters. Healthpeak's stock dropped 3% on Thursday, worse than the broader stock market, but still outperforming competitors Ventas and Welltower, MarketWatch reports.
Healthpeak President and Chief Investment Officer Scott Brinker has been named to replace Herzog as CEO and on the board. He will retain the title of president.
Healthpeak estimates Herzog's severance package will cost $25M to $30M, although the final total will be affected by stock options that will vest over a period of up to two years. Aside from the stock options, Herzog will be paid three times his annual salary and a full year's annual bonus, plus a prorated bonus for the portion of 2022 in which he served as CEO, in cash, the filing states.
With over $15B in total assets against more than $8B in liabilities and no major debt maturities until 2025 as of its second-quarter SEC report, Healthpeak is on solid financial footing. It has extensive life sciences footprints in the three biggest markets in the country for the sector — Boston, San Francisco and San Diego. It also has medical office properties in a variety of markets, including one in Bentonville, Arkansas, where Walmart is headquartered, acquired in May for $26M, according to its Q2 filing.
In Cambridge, Massachusetts, where Healthpeak has bought several buildings and plans to build more at a complex in the neighborhood of Alewife, it has run into opposition from local officials wary of overbuilding in the life sciences sector outside of the Kendall Square hub.
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