A nationwide slowdown in life sciences leasing activity tempered enthusiasm for Denver-based REIT Healthpeak Properties despite overall revenue growth in the first quarter.

Healthpeak posted $687M in revenue for the quarter, an annual increase of 14.4%. The company beat earnings expectations and generally turned in a strong quarter, but it maintained its existing guidance for the rest of the year on concerns about life sciences, which makes up about 35% of its portfolio.

Tenant demand for other parts of the company’s holdings, including outpatient medical space and senior housing, remains strong, but the life sciences real estate market is softening due to shifting dynamics, CEO Scott Brinker said during Healthpeak’s earnings call April 25.

“At any point in time, a number of our tenants are in the market actively raising capital, and that’s just been a lot more difficult for the last three to four months,” Brinker said of the company’s lab tenants. “A lot depends on whether some of this regulatory uncertainty and market chaos stabilizes, in which case I think a good number of them will end up raising money, and if not, obviously a number of them will not.”

Healthpeak's outpatient medical segment delivered 5% same-store growth year-over-year, while its senior housing portfolio posted a 16% increase compared to the first quarter of 2024 driven by higher occupancy and rent growth.

Occupancy across its continuing care retirement communities rose to 86% at the end of the quarter, with management projecting further gains through the remainder of the year.

Healthpeak signed 450K SF of lab leases year-to-date and said its leasing pipeline is at its highest level since last summer. But executives said that much of the new leasing activity is still in the preliminary letter-of-intent stage and could be delayed.

Healthpeak expects lab same-store growth to slow after a first-quarter boost from free-rent expirations and another big one-time saving: The company brought 19M SF of property management across 14 markets in-house late last year, temporarily lowering costs.

While Brinker said he believes federal policy shifts — including the push by President Donald Trump to onshore pharmaceutical manufacturing — will ultimately bolster U.S. demand for lab space, Healthpeak Chief Development Officer and Head of Lab Scott Bohn said that “uncertainty and instability” in funding for the U.S. National Institutes of Health and Food and Drug Administration have weighed on tenant decision-making in early 2025.

About 800 NIH research projects have been axed by the Trump administration, according to a recent analysis by science publication Nature, while a draft budget document obtained this month by Biopharma Dive shows a 19% decrease in FDA funding.

Healthpeak has paused new lab developments since 2021 and signaled Friday that new investment activity would remain selective, citing the need to reassess risk-adjusted returns amid tighter capital markets and a slower leasing environment.

Despite the growing uncertainty, Healthpeak maintained its adjusted funds from operations guidance of $1.81 to $1.87 per share for 2025. It also affirmed its $500M capital deployment plan for the year.

In the first quarter, Healthpeak issued $500M in unsecured notes at 5.375%, maintaining a leverage ratio of 5.2x net debt to earnings before interest, taxes, depreciation and amortization and preserving $2.8B in liquidity. The company repurchased nearly $100M of its own stock so far this year at an implied 8% cap rate, a move executives said reflects the current attractive pricing of Healthpeak’s shares compared to private-market assets.

The news comes as Healthpeak makes big moves outside of Colorado. It just announced a partnership with Hines to develop the 5M SF Cambridge Point master-planned district in Cambridge, Massachusetts. Hines will take the lead on residential development and Healthpeak will be the master developer.

“Hines is prepared to get started within six to 12 months on the residential component,” Chief Financial Officer Kevin Moses said during the call while declining to put specific dollars and cents on the deal. “And the economics there are actually beneficial. It's for value on the land and we get a share of the upside. So I think we're going to actually be able to pull in some economics from the Hines transaction.”