Earnings Release & Supplemental Report

10-Q Filing

Discussion + Reconciliation of Non-GAAP Financial Measures

• The COVID-19 pandemic continues to evolve rapidly. In order to provide some visibility of the impact of COVID-19 on Healthpeak, we have included some of our key operating metrics through April 2020 in this release and a framework to assess the potential financial impacts of the pandemic on pages 42 and 43 in the First Quarter 2020 Supplemental Report.
• Balance sheet and liquidity:
  • In March 2020, settled remaining outstanding equity forward contracts for proceeds of approximately $1.06 billion, bringing total liquidity as of April 30 to $3.0 billion with full availability on Healthpeak’s $2.5 billion revolving credit facility and approximately $500 million of cash and cash equivalents.
  • Reduced Net Debt to Adjusted EBITDAre to 4.8x as of March 31, 2020.
  • Received rating affirmations from Fitch (BBB+, stable outlook) and Moody’s (Baa1, revised outlook to negative).
• Transactions:
  • In January 2020, closed on the previously announced transactions with Brookdale Senior Living (“Brookdale”) related to the acquisition of Brookdale's 51% interest in 13 CCRCs for $641 million (which includes payment of a $100 million management termination fee) and the sale of the 18-property triplenet portfolio for $405 million.
  • In April 2020, closed on the previously announced $320 million life science acquisition of The Post, a 426,000 square foot life science property located within the Route 128 submarket of Boston, Massachusetts. The stabilized cash and GAAP capitalization rates are 5.1% and 6.5%, respectively.
  • In April 2020, the tenant exercised its purchase option to acquire the three Frost Street medical office buildings in San Diego, CA for proceeds of approximately $106 million, representing a cash capitalization rate of 6.0%. Healthpeak received a non-refundable deposit of approximately $5 million and will also receive an early lease termination fee of $1.1 million. The transaction is expected to close in the second quarter of 2020.
  • In February 2020, the tenant closed its purchase option on the North Fulton hospital generating proceeds of approximately $82 million, representing a cash capitalization rate of 10%.
• Development additions and completions:
  • Added an on-campus Class A medical office building to Healthpeak's development program with HCA Healthcare. The 116,500 square foot five-story building will be located on the Woman's Hospital of Texas campus in Houston, TX. The $35 million development will expand the Woman's Hospital of Texas campus and will complement Healthpeak's existing One Fannin medical office building located adjacent to the development site. The project is 36% pre-leased by HCA with another 27% well into negotiations with third party tenants.
  • Delivered Phase IV of The Cove, representing 164,000 square feet that is 100% leased. The delivery of Phase IV completes the construction of this one million square foot Class A life science campus in South San Francisco.
  • Delivered the first building at Phase I of The Shore at Sierra Point in South San Francisco, representing 130,000 square feet that is 100% leased.
  • Delivered a 28,000 square foot life science amenity building in San Diego that is 100% leased and is part of the larger three-property, 252,000 square foot Sorrento Summit life science campus.
• Development leasing:
  • In March 2020, as previously announced, signed a 32,000 square foot long-term lease at our 75 Hayden development project in Boston, Massachusetts, bringing year to date leasing at 75 Hayden to 154,000 square feet. The 214,000 square foot Class A development project is expected to be delivered in the fourth quarter and is now 72% pre-leased.
  • In January 2020, as previously announced, executed a long-term lease with Janssen BioPharma, Inc., part of the Johnson & Johnson Family of Companies, for approximately 60% of Phase II of The Shore at Sierra Point.
• Reporting Updates:
  • Beginning this first quarter of 2020, we report segment information inclusive of our share of unconsolidated joint ventures and exclusive of our partners' noncontrolling interest share of consolidated joint ventures. Accordingly, certain metrics reported for the quarter ended March 31, 2020, including Cash NOI, are now presented at Healthpeak’s pro-rata share. Metrics reported for comparative periods have also been recast to conform with current period presentation.
  • Maintained quarterly common stock cash dividend of $0.37 per share to be paid on May 19, 2020, to stockholders of record as of the close of business on May 8, 2020.
• Named to S&P Global’s Sustainability Yearbook for the fifth consecutive year.