Healthpeak Properties, Inc. · NYSE:DOC
Healthpeak Properties — HCP — Q2 2019 Earnings Presentation
56 slides from Healthpeak Properties's earnings presentation, Jul 31, 2019
Slide 1: Earnings Release and Supplemental Report
Earnings Release and Supplemental Report Scripps Wateridge 1 San Diego, CA second quarterReturn 2019 to TOC
Slide 2: Table of Contents
Earnings Release 3 Consolidated Financial Statements 8 Overview 12 Portfolio Summary 13 Property Count Reconciliations 16 Capitalization and Indebtedness 17 Investment Summary 20 Developments and Redevelopments 22 Capital Expenditures 24 Portfolio Diversification 25 Expirations and Maturities 26 Tri
Slide 3: HCP Reports Second Quarter 2019 Results
HCP Reports Second Quarter 2019 Results IRVINE, CA, July 31, 2019 -- HCP, Inc. (NYSE: HCP) today announced results for the second quarter ended June 30, 2019. For the quarter, HCP generated a net loss of $0.03 per share, NAREIT FFO of $0.41 per share, FFO as adjusted of $0.44 per share and blended T
Slide 4: Same Property Portfolio Operating Summary
SAME PROPERTY PORTFOLIO OPERATING SUMMARY The table below outlines the year-over-year three month and year-to-date SPP Cash NOI growth: Year-Over-Year Total SPP Cash NOI Growth % of Total Three Year-To- SPP Month Date Senior housing 30.7% 1.4% 0.5% Life science 26.0% 6.1% 6.5% Medical office 37.1% 3
Slide 5: HRA Lease Amendment and Development Updates
HRA LEASE AMENDMENT In the second quarter, HCP entered into an agreement with HRA to amend the existing leases. HCP will sell six low performing non core properties and combine the remaining 8 properties into a single master lease with a common maturity date in December 2028 and 2.5% annual escalato
Slide 6: Revolving Credit Facility and New Term Loan
REVOLVING CREDIT FACILITY AND NEW TERM LOAN In May 2019, HCP closed on a $2.5 billion unsecured revolving credit facility (“credit facility”) and a new five year $250 million unsecured term loan. HCP successfully reduced its borrowing costs by 5 basis points under the credit facility and extended th
Slide 7: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Statements in this release that are not historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, am
Slide 8: Consolidated Balance Sheets
HCP, Inc. Consolidated Balance Sheets In thousands, except share and per share data (unaudited) June 30, 2019 December 31, 2018 Assets Real estate: Buildings and improvements $ 11,784,671 $ 10,877,248 Development costs and construction in progress 496,662 537,643 Land 1,879,227 1,637,506 Accumulated
Slide 9: Consolidated Statements of Operations
HCP, Inc. Consolidated Statements of Operations In thousands, except per share data (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Revenues: Rental and related revenues $ 301,197 $ 317,840 $ 595,419 $ 634,592 Resident fees and services 177,766 136,774 304,461 2
Slide 10: Funds From Operations
HCP, Inc. Funds From Operations In thousands, except per share data (unaudited) Three Months Ended Six Months Ended (1) For the three and six months ended June 30, 2019, June 30, June 30, represents the gain related to the acquisition of the 2019 2018 2019 2018 outstanding equity interests in a prev
Slide 11: Funds Available for Distribution
HCP, Inc. Funds Available for Distribution In thousands (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 FFO as adjusted applicable to common shares $ 212,939 $ 219,511 $ 424,961 $ 446,861 Amortization of deferred compensation(1) 4,308 4,299 7,898 7,719 Amortizat
Slide 12: Overview
The Numbers Overview (1) As of and for the quarter and six months ended June 30, 2019, dollars, square feet, and shares in thousands, except per share data (1) Reconciliations, definitions, and important discussions 2Q19 YTD 2019 regarding the usefulness and limitations of the non-GAAP Financial Met
Slide 13: Portfolio Summary
Portfolio Summary As of and for the quarter ended June 30, 2019, dollars in thousands Property Average Portfolio Portfolio Private Count Age Investment Income Pay %(1) PORTFOLIO INCOME Wholly Owned Property Portfolio Senior housing triple-net 105 21 $ 1,992,445 $ 53,807 91.7 SHOP 124 20 3,634,908 40
Slide 14: Quarter NOI Summary
Quarter NOI Summary For the quarter ended June 30, 2019, dollars in thousands NOI SUMMARY NOI SPP NOI SPP Real Real Estate Operating Estate SPP Operating Revenues Expenses NOI(1) Revenues Expenses SPP NOI Wholly-Owned Senior housing triple-net $ 49,866 $ (866) $ 49,000 $ 46,630 $ (80) $ 46,550 SHOP
Slide 15: Year-to-Date NOI Summary
Year-to-Date NOI Summary For the six months ended June 30, 2019, dollars in thousands NOI SUMMARY NOI SPP NOI SPP Real Real Estate Operating Estate SPP Operating Revenues Expenses NOI(1) Revenues Expenses SPP NOI Wholly-Owned Senior housing triple-net $ 108,758 $ (1,859) $ 106,899 $ 92,547 $ (159) $
Slide 16: Property Count Reconciliations
Property Count Reconciliations As of June 30, 2019 PROPERTY COUNT RECONCILIATION Senior Housing Life Medical Triple-net SHOP Science Office Other Total Prior Quarter Total Property Count 126 102 125 269 112 734 Acquisitions — 12 2 1 — 15 Assets sold — (1) (1) (5) — (7) Senior housing triple-net to S
Slide 17: Capitalization
Capitalization Dollars and shares in thousands, except price per share data TOTAL CAPITALIZATION June 30, 2019 Shares Value Total Value Common stock (NYSE: HCP) 491,109 $ 31.98 $ 15,705,666 Convertible partnership (DownREIT) units 6,549 31.98 209,437 Total Market Equity 497,658 $ 15,915,103 Consolid
Slide 18: Indebtedness and Ratios
Indebtedness and Ratios As of June 30, 2019, dollars in thousands DEBT MATURITIES AND SCHEDULED PRINCIPAL REPAYMENTS (AMORTIZATION) HCP's Share of Senior Unsecured Notes(3) Mortgage Debt Unconsolidated JV Debt Enterprise Debt Bank Line Consolidated of Credit(1) Term Loan(2) Amounts Rates %(4) Amount
Slide 19: Indebtedness and Ratios
Indebtedness and Ratios As of June 30, 2019, dollars in thousands, includes HCP's pro rata share of unconsolidated JVs DEBT STRUCTURE Weighted Average Years to Balance % of Total Rates %(1) Maturity(1) Secured Fixed rate $ 201,592 3 4.15 12.1 Floating rate 273,162 4 4.83 2.6 Combined $ 474,754 7 4.5
Slide 20: Investment Summary
Investment Summary For the three and six months ended June 30, 2019, dollars and square feet in thousands INVESTMENT SUMMARY Property Three Months Ended Six Months Ended MSA Date Capacity Count Property Type June 30, 2019 June 30, 2019 ACQUISITIONS 87/101 CambridgePark Drive(1) Boston, MA January 64
Slide 21: Investment Summary: Assets Held for Sale and Dispositions
Investment Summary ASSETS HELD FOR SALE Property Projected Sales Trailing Cash Capacity Count Price Yield(1) Various SHOP 1,691 Units 20 $ 146,170 Various Senior housing triple-net 120 Units 2 10,600 Various Medical office(2) 195 Sq. Ft. 6 16,750 Total 28 $ 173,520 6.5% DISPOSITIONS Property Sales P
Slide 22: Developments
Developments As of June 30, 2019, dollars and square feet in thousands DEVELOPMENT PROJECTS IN PROCESS Property Placed Cost to Total at Project MSA Property Type Count in Service CIP(1) Complete(1) Completion Wholly-Owned Ridgeview San Diego, CA Life science 3 $ 31,734 $ 38,103 $ 3,275 $ 73,112 Sorr
Slide 23: Redevelopments and Land Held for Development
Redevelopments and Land Held for (1) Development As of June 30, 2019, dollars and square feet in thousands REDEVELOPMENT PROJECTS IN PROCESS Incremental Costs Estimated Property Property Placed in Cost to Project Completion (2) Project MSA Type Count Service CIP Complete(2) Total Start Date(3) Wholl
Slide 24: Capital Expenditures
Capital Expenditures For the three and six months ended June 30, 2019, dollars in thousands, except per unit/square foot Senior Housing SECOND QUARTER Triple-net SHOP Life Science Medical Office Other Total Wholly-Owned Recurring capital expenditures $ 339 $ 4,560 $ 1,102 $ 2,939 $ — $ 8,939 Tenant
Slide 25: Portfolio Diversification
Portfolio Diversification As of and for the quarter ended June 30, 2019, dollars in thousands, includes HCP's pro rata share of unconsolidated JVs PORTFOLIO INCOME BY MSA Property Senior Housing Medical MSA Count(1) Triple-net SHOP Life Science Office Other Total % of Total San Francisco, CA 81 $ 1,
Slide 26: Expirations and Maturities
Expirations and Maturities As of June 30, 2019, dollars in thousands EXCLUDES PURCHASE AND PREPAYMENT OPTIONS Annualized Base Rent(1) Senior Housing Medical Interest Year Total % of Total Triple-net Life Science Office Other Income 2019(2) $ 54,328 5 $ — $ 14,002 $ 40,326 $ — $ — 2020 106,390 10 14,
Slide 27: Triple-Net Master Lease Profile
(1)(2) Triple-Net Master Lease Profile (1) Excludes properties held for sale or sold, master leases with properties acquired during the period required to calculate CFC, and master leases that include newly completed developments that are not Stabilized. Additionally, excludes a data point % of Weig
Slide 28: Senior Housing Triple-net
Senior Housing Triple-net As of and for the quarter ended June 30, 2019, dollars in thousands, except REVPOR Facility Facility Property Occupancy REVPOR EBITDARM EBITDAR Property Portfolio Count Investment Cash NOI Units % Triple-Net CFC CFC Assisted/Independent living(1)(2) 103 $ 1,736,340 $ 47,902
Slide 29: Senior Housing Triple-net Same Property Portfolio
Senior Housing Triple-net Same Property Portfolio Dollars in thousands, except REVPOR 2Q18 3Q18 4Q18 1Q19 2Q19 Property count 103 103 103 103 103 Investment $ 1,971,541 $ 1,975,852 $ 1,978,066 $ 1,979,071 $ 1,973,301 Units 11,046 11,049 11,035 11,038 11,043 Occupancy % 86.4 85.4 85.2 85.5 85.0 REVPO
Slide 30: Senior Housing Triple-net New Supply
Senior Housing Triple-net New Supply As of and for the quarter ended June 30, 2019, dollars in thousands NEW SUPPLY ANALYSIS(1) Senior Housing Triple-net Portfolio 5-Mile Radius(2) % of Cash NOI 5-Year 80+ Triple- Properties/ Exposed Population 80+ Median Median net Cash Units Under to New Growth %
Slide 31: SHOP
(1) SHOP As of and for the quarter ended June 30, 2019, dollars in thousands, except REVPOR INVESTMENTS Property REVPOR Count Investment Cash NOI Units Occupancy % SHOP Operator Brookdale Senior Living 26 $ 855,560 $ 12,945 4,037 84.9 $ 3,960 Sunrise Senior Living(1) 39 923,126 7,685 3,855 81.2 6,82
Slide 32: SHOP MSA
SHOP MSA As of and for the quarter ended June 30, 2019, dollars in thousands, except REVPOR OPERATING PORTFOLIO METRICS Units(1) REVPOR SHOP(1) % of SHOP Occupancy MSA Investment Cash NOI Cash NOI AL IL % AL IL Houston, TX $ 348,144 $ 6,046 15.0 311 1,723 86.0 $ 4,839 $ 2,814 Chicago, IL 187,099 3,0
Slide 33: SHOP Same Property Portfolio - Core
SHOP Same Property Portfolio Dollars in thousands, except REVPOR CORE Sequential Year-Over- 2Q18 3Q18 4Q18 1Q19 2Q19 Growth Year Growth Property count 28 28 28 28 28 — — Investment $ 962,336 $ 967,253 $ 977,822 $ 981,180 $ 987,207 0.6 % 2.6 % Units 3,941 3,936 3,936 3,935 3,936 —% (0.1)% Occupancy %
Slide 34: SHOP Same Property Portfolio - Total
SHOP Same Property Portfolio Dollars in thousands, except REVPOR TOTAL Sequential Year-Over- 2Q18 3Q18 4Q18 1Q19 2Q19 Growth Year Growth Property count 39 39 39 39 39 — — Investment $ 1,235,950 $ 1,241,985 $ 1,256,350 $ 1,258,392 $ 1,265,778 0.6 % 2.4 % Units 5,441 5,437 5,437 5,437 5,438 — % (0.1 )
Slide 35: SHOP New Supply
SHOP New Supply As of and for the quarter ended June 30, 2019, dollars in thousands NEW SUPPLY ANALYSIS(1) SHOP 5-Mile Radius(2) Cash NOI 5-Year 80+ % of Properties/ Exposed Population 80+ Median SHOP Units Under to New Growth % Penetration Household Median Unemploy- MSA Units Cash NOI Cash NOI Cons
Slide 36: Life Science
Life Science As of and for the quarter ended June 30, 2019, dollars and square feet in thousands INVESTMENTS(1) Property Cash Square Occupancy MSA Count Investment NOI Feet % San Francisco, CA 75 $ 3,119,553 $ 52,371 4,612 95.7 San Diego, CA 30 820,667 14,340 2,009 96.1 Boston, MA 3 315,926 4,700 46
Slide 37: Life Science Lease Expirations and Tenants
Life Science As of June 30, 2019, dollars and square feet in thousands SELECTED LEASE EXPIRATION DATA (NEXT 5 YEARS) Total San Francisco San Diego Boston Remaining Leased Square Annualized Square Annualized Square Annualized Square Annualized Square Annualized Year Feet % Base Rent(1) % Feet Base Re
Slide 38: Life Science Leasing Activity
Life Science Square feet in thousands LEASING ACTIVITY Annualized HCP Tenant Leased Base Rent % Change in Improvements Leasing Costs Average Lease Retention Square Feet Per Sq. Ft. Cash Rents per Sq. Ft. per Sq. Ft. Term (Months) Rate YTD Leased Square Feet as of March 31, 2019 6,686 $ 43.71 Acquisi
Slide 39: Medical Office
Medical Office As of and for the quarter ended June 30, 2019, dollars and square feet in thousands PORTFOLIO BY MARKET(1) Square Feet On-campus(2) Off-campus(3) Total Property Occupancy MSA Count Investment Cash NOI % Multi-tenant Single-tenant Multi-tenant Single-tenant Multi-tenant Single-tenant %
Slide 40: Medical Office Square Feet by Health System
Medical Office As of and for the quarter ended June 30, 2019, square feet in thousands SQUARE FEET BY HEALTH SYSTEM Square Feet Directly Leased by Health System Health System Credit % of Annualized Health System Rank(1) Rating On-Campus Anchored(2) Adjacent(2) Off-Campus Total % of Total % Square Fe
Slide 41: Medical Office Lease Expirations
Medical Office As of and for the quarter ended June 30, 2019, dollars and square feet in thousands SELECTED LEASE EXPIRATION DATA (NEXT 5 YEARS)(1) Total On-Campus Off-Campus Leased Annualized Annualized Annualized Year Square Feet % Base Rent(2) % Square Feet Base Rent(2) Square Feet Base Rent(2) 2
Slide 42: Other Wholly-owned
Other Wholly-owned As of and for the quarter ended June 30, 2019, dollars in thousands LEASED PROPERTIES Facility Facility (1) Certain operators in our hospital portfolio are Property Occupancy EBITDARM EBITDAR not required under their respective leases to Type/Operator Count Investment Cash NOI Bed
Slide 43: Other Unconsolidated JVs
Other Unconsolidated JVs(1) As of and for the quarter ended June 30, 2019, dollars and square feet in thousands Other SHOP Medical SELECTED FINANCIAL DATA AT 100% Total CCRC JV JVs U.K. JV Office Remaining Joint ventures' Investment $ 2,317,085 $ 1,509,194 $ 238,232 $ 508,605 $ 51,478 $ 9,576 Joint
Slide 44: Other Unconsolidated JV Capital
Other Unconsolidated JV Capital Represents HCP's pro rata share of unconsolidated JVs for the three and six months ended June 30, 2019, dollars in thousands UNCONSOLIDATED JV CAPITAL Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 FAD capital expenditures $ 1,074 $ 2,246 Revenue enha
Slide 45: Other CCRC JV
Other CCRC JV Dollars in thousands, except REVPOR CCRC JV 2Q18 3Q18 4Q18 1Q19 2Q19 Property count 15 15 15 15 15 Units 7,262 7,268 7,273 7,269 7,270 Occupancy % 85.8 85.5 85.7 85.8 85.7 REVPOR(1) $ 5,132 $ 5,188 $ 5,206 $ 5,208 $ 5,262 HCP's SHARE OF CCRC JV Investment $ 718,920 $ 723,044 $ 729,503
Slide 46: 2019 Guidance
2019 Guidance Projected full year 2019, dollars in millions, except per share amounts Full Year 2019 Guidance (July 31, 2019) Net income, FFO and FFO as Adjusted per Share Guidance Diluted earnings per common share $0.15 - $0.21 Diluted NAREIT FFO per common share $1.62 - $1.66 Diluted FFO as adjust
Slide 47: Glossary
Glossary Adjusted Fixed Charge Coverage* Consolidated Gross Assets* Adjusted EBITDAre divided by Fixed Charges. Adjusted Fixed Charge Coverage is a supplemental The carrying amount of total assets, excluding investments in and advances to our unconsolidated measure of liquidity and our ability to me
Slide 48: Glossary
Glossary Enterprise Gross Assets* Fixed Charges* Consolidated Gross Assets plus our pro rata share of total gross assets from our unconsolidated Total interest expense plus capitalized interest plus preferred stock dividends (if applicable). Fixed JVs, after adding back accumulated depreciation and
Slide 49: Glossary
Glossary Net Debt* Real Estate Revenues* Enterprise Debt less the carrying amount of cash and cash equivalents as reported in our Real Estate Revenues include rental related revenues, tenant recoveries, resident fees and services consolidated financial statements and our pro rata share of cash and c
Slide 50: Glossary
Glossary Secured Debt Ratio* Enterprise Secured Debt divided by Enterprise Gross Assets. Secured Debt Ratio is a supplemental measure of our financial position, which enables both management and investors to analyze our leverage and to compare our leverage to that of other companies. Square Feet (Sq
Slide 51: Debt Ratios: Adjusted EBITDAre and Fixed Charge Coverage
Adjusted EBITDAre and Adjusted Debt Ratios Fixed Charge Coverage Dollars in thousands NET INCOME TO ADJUSTED EBITDAre Three Months Ended June 30, 2019 Net income (loss) $ (9,980) Interest expense 56,942 Income tax expense (benefit) (1,864) Depreciation and amortization 165,296 Other depreciation and
Slide 52: Debt Ratios
Debt Ratios As of and for the quarter ended June 30, 2019, dollars in thousands ENTERPRISE DEBT AND NET DEBT June 30, 2019 Bank line of credit $ 530,004 Term loan 248,821 Senior unsecured notes 5,262,694 Mortgage debt(1) 190,233 Other debt 87,211 Consolidated Debt $ 6,318,963 HCP's share of unconsol
Slide 53: Company Information
COMPANY Information BOARD OF DIRECTORS BRIAN G. CARTWRIGHT LYDIA H. KENNARD Chairman of the Board, HCP, Inc. President and Chief Executive Officer, Former General Counsel KDG Construction Consulting U.S. Securities and Exchange Commission KATHERINE M. SANDSTROM THOMAS M. HERZOG Advisor, President an
Slide 54: Forward-Looking Statements & Risk Factors
Medical City Dallas Forward-Looking Statements Dallas, TX & Risk Factors Statements contained in this supplemental report which are not historical facts are "forward- looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Ex
Slide 55: Forward-Looking Statements & Risk Factors (continued)
Forward-Looking Statements The Cove South San Francisco, CA & Risk Factors (continued) and the renewal or rollover of existing leases; the Company’s or its counterparties’ ability to fulfill obligations, such as financing conditions and/or regulatory approval requirements, required to successfully c
Slide 56: Corporate Headquarters and Offices
CORPORATE HEADQUARTERS SAN FRANCISCO OFFICE NASHVILLE OFFICE 1920 MAIN STREET, SUITE 1200 950 TOWER LANE, SUITE 1650 3000 MERIDIAN BOULEVARD, SUITE 200 IRVINE, CA 92614 FOSTER CITY, CA 94404 FRANKLIN, TN 37067 (949) 407-0700 56 Return to TOC