Healthpeak Properties, Inc. · NYSE:DOC
Healthpeak Properties — HCP — Q1 2019 Earnings Presentation
54 slides from Healthpeak Properties's earnings presentation, May 1, 2019
Slide 1: Earnings Release and Supplemental Report
Earnings Release and Supplemental Report first quarter 2019 Discovery Village at Naples Naples, FL 1
Slide 2: Table of Contents
Earnings Release 3 Consolidated Financial Statements 7 Overview 11 Portfolio Summary 12 Property Count Reconciliations 14 Capitalization and Indebtedness 15 Investment Summary 18 Developments and Redevelopments 19 Capital Expenditures 21 Portfolio Diversification 22 Expirations and Maturities 24 Tri
Slide 3: HCP Reports First Quarter 2019 Results
HCP Reports First Quarter 2019 Results IRVINE, CA, May 1, 2019 -- HCP, Inc. (NYSE: HCP) today announced results for the first quarter ended March 31, 2019. For the quarter, we generated net income of $0.13 per share, NAREIT FFO of $0.43 per share, FFO as adjusted of $0.44 per share and blended Total
Slide 4: Transaction Updates: Discovery Portfolio Acquisition
TRANSACTION UPDATES DISCOVERY PORTFOLIO ACQUISITION In April 2019, HCP acquired a portfolio of nine senior housing properties with a total of 1,242 units for $445 million. This relationship-driven acquisition is comprised of modern, highly-amenitized physical plants with an average age of three year
Slide 5: Balance Sheet and Capital Market Activities
BALANCE SHEET AND CAPITAL MARKET ACTIVITIES Year-to-date, we sold 5.1 million shares of common stock under our ATM program, via forward sales agreements, at an initial weighted average net price of $31.02 per share. We expect to settle the forward contracts over the next 12 months to fund acquisitio
Slide 6: Company Information
COMPANY INFORMATION HCP has scheduled a conference call and webcast for Thursday, May 2, 2019, at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time) to present its performance and operating results for the first quarter ended March 31, 2019. The conference call is accessible by dialing (888) 317-6003
Slide 7: Consolidated Balance Sheets
HCP, Inc. Consolidated Balance Sheets In thousands, except share and per share data (unaudited) March 31, 2019 December 31, 2018 Assets Real estate: Buildings and improvements $ 11,220,557 $ 10,877,248 Development costs and construction in progress 605,165 537,643 Land 1,717,259 1,637,506 Accumulate
Slide 8: Consolidated Statements of Operations
HCP, Inc. Consolidated Statements of Operations In thousands, except per share data (unaudited) Three Months Ended March 31, 2019 2018 Revenues: Rental and related revenues $ 294,222 $ 316,752 Resident fees and services 126,695 142,814 Income from direct financing leases 13,524 13,266 Interest incom
Slide 9: Funds From Operations
HCP, Inc. Funds From Operations In thousands, except per share data (unaudited) Three Months Ended (1) For the three months ended March 31, 2018, March 31, represents the loss on consolidation of seven U.K. 2019 2018 care homes. (2) For the three months ended March 31, Net income (loss) applicable t
Slide 10: Funds Available for Distribution
HCP, Inc. Funds Available for Distribution In thousands (unaudited) Three Months Ended March 31, 2019 2018 FFO as adjusted applicable to common shares $ 212,025 $ 227,352 Amortization of deferred compensation(1) 3,590 3,420 Amortization of deferred financing costs 2,699 3,336 Straight-line rents (6,
Slide 11: Overview
The Numbers Overview (1) As of and for the quarter ended March 31, 2019, dollars, square feet and shares in thousands, except per share data (1) Reconciliations, definitions and important discussions regarding the usefulness and limitations of the non-GAAP 1Q19 financial measures used in this report
Slide 12: Portfolio Summary
Portfolio Summary As of and for the quarter ended March 31, 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 126 21 $ 2,544,978 $ 58,463 92.7 Unconsolidated JVs(2) S
Slide 13: NOI Summaries
NOI Summaries For the quarter ended March 31, 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 $ 58,892 $ (993) $ 57,899 $ 56,049 $ (88) $ 55,960 SHOP 126,1
Slide 14: Property Count Reconciliations
Property Count Reconciliations As of March 31, 2019 PROPERTY COUNT RECONCILIATION Senior Housing Life Medical Triple-net SHOP Science Office Other Total Prior Quarter Total Property Count 146 93 124 267 114 744 Acquisitions — — 1 — — 1 Assets sold (2) (9) — — — (11) Senior housing triple-net to SHOP
Slide 15: Capitalization
Capitalization Dollars and shares in thousands, except price per share data TOTAL CAPITALIZATION March 31, 2019 Shares Value Total Value Common stock (NYSE: HCP) 477,929 $ 31.30 $ 14,959,177 Convertible partnership (DownREIT) units 6,430 31.30 201,259 Total Market Equity 484,359 $ 15,160,436 Consoli
Slide 16: Indebtedness and Ratios
Indebtedness and Ratios As of March 31, 2019, dollars in thousands DEBT MATURITIES AND SCHEDULED PRINCIPAL REPAYMENTS (AMORTIZATION) HCP's Share of Senior Unsecured Notes Mortgage Debt Unconsolidated JV Debt Enterprise Debt Bank Line Consolidated of Credit(1) Term Loan Amounts Rates %(2) Amounts Rat
Slide 17: Indebtedness and Ratios
Indebtedness and Ratios As of March 31, 2019, dollars in thousands, includes HCP's pro rata share of unconsolidated JVs DEBT STRUCTURE Weighted Average Balance % of Total Rates % Years to Maturity Secured Fixed rate $ 179,401 3 4.19 15.2 Floating rate 288,453 5 5.20 2.2 Combined $ 467,854 8 4.81 7.2
Slide 18: Investment Summary
Investment Summary For the three months ended March 31, 2019, dollars and square feet in thousands INVESTMENT SUMMARY Property Three Months Ended Date Capacity Count Property Type March 31, 2019 Acquisition - Cambridge, MA(1) January 64 Sq. Ft. 1 Life science $ 91,500 Development fundings 90,124 Red
Slide 19: Developments
Developments As of March 31, 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 $ 37,194 $ 4,184 $ 73,112 The
Slide 20: Redevelopments and Land Held for Development
Redevelopments and Land Held for (1) Development As of March 31, 2019, dollars and square feet in thousands REDEVELOPMENT PROJECTS IN PROCESS Incremental Costs Property Property Placed in Cost to Project Estimated Project(2) MSA Type Count Service CIP(3) Complete(3) Total Start Completion(4) Wholly-
Slide 21: Capital Expenditures
Capital Expenditures For the three months ended March 31, 2019, dollars in thousands, except per unit/square foot Senior Housing Triple-net SHOP Life Science Medical Office Other Total Wholly-Owned Recurring capital expenditures $ 305 $ 2,880 $ 540 $ 3,001 $ — $ 6,725 Tenant improvements - 2nd gener
Slide 22: Portfolio Diversification
Portfolio Diversification As of and for the quarter ended March 31, 2019, dollars in thousands PORTFOLIO INCOME BY MSA Property Senior Housing Medical MSA Count(1) Triple-net SHOP Life Science Office Other Total % of Total San Francisco, CA 76 $ 2,634 $ — $ 47,535 $ 798 $ — $ 50,967 18 Dallas, TX 41
Slide 23: Portfolio Diversification
Portfolio Diversification As of and for the quarter ended March 31, 2019, dollars in thousands, includes HCP's pro rata share of unconsolidated JVs PORTFOLIO INCOME BY OPERATOR/TENANT Tenant/Credit Exposure SHOP/Operator Exposure Senior % of % of Property Housing Life Medical Portfolio Property Port
Slide 24: Expirations and Maturities
Expirations and Maturities As of March 31, 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) $ 68,708 7 $ 2,375 $ 13,288 $ 53,045 $ — $ — 2020 135,589 1
Slide 25: 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 3 data % of Weighted po
Slide 26: Senior Housing Triple-net
(1) Senior Housing Triple-net As of and for the quarter ended March 31, 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 124 $ 2,289,212 $ 55,227
Slide 27: Senior Housing Triple-net Same Property Portfolio
Senior Housing Triple-net Same Property Portfolio Dollars in thousands, except REVPOR 1Q18 2Q18 3Q18 4Q18 1Q19 Property count 126 126 126 126 126 Investment $ 2,533,774 $ 2,535,100 $ 2,539,660 $ 2,543,823 $ 2,544,978 Units 12,944 12,945 12,953 12,939 12,942 Occupancy % 87.3 86.4 85.6 85.7 85.8 REVPO
Slide 28: Senior Housing Triple-net New Supply
Senior Housing Triple-net New Supply As of and for the quarter ended March 31, 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 29: SHOP
(1) SHOP As of and for the quarter ended March 31, 2019, dollars in thousands, except REVPOR INVESTMENTS Property REVPOR Count Investment Cash NOI Units Occupancy % SHOP Operator Brookdale 27 $ 852,761 $ 13,616 4,189 85.3 $ 4,061 Atria Senior Living 27 598,147 8,893 3,542 81.6 4,464 Sunrise Senior L
Slide 30: SHOP MSA
SHOP MSA As of and for the quarter ended March 31, 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 $ 303,608 $ 6,243 20.5 311 1,606 87.4 $ 4,943 $ 2,844 Denver, CO 174,908 2,4
Slide 31: SHOP Same Property Portfolio (Core)
SHOP Same Property Portfolio Dollars in thousands, except REVPOR CORE Sequential Year-Over- 1Q18 2Q18 3Q18 4Q18 1Q19 Growth Year Growth Property count 33 33 33 33 33 — — Investment $ 1,038,212 $ 1,043,002 $ 1,048,281 $ 1,055,657 $ 1,059,218 0.3 % 2.0 % Units 4,338 4,343 4,338 4,339 4,338 —% — % Occu
Slide 32: SHOP Same Property Portfolio (Total)
SHOP Same Property Portfolio Dollars in thousands, except REVPOR TOTAL Sequential Year-Over- 1Q18 2Q18 3Q18 4Q18 1Q19 Growth Year Growth Property count 50 50 50 50 50 — — Investment $ 1,371,330 $ 1,378,722 $ 1,385,311 $ 1,397,066 $ 1,399,561 0.2 % 2.1 % Units 6,404 6,408 6,404 6,405 6,405 —% — % Occ
Slide 33: SHOP New Supply
SHOP New Supply As of and for the quarter ended March 31, 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 Con
Slide 34: Life Science
Life Science As of and for the quarter ended March 31, 2019, dollars and square feet in thousands INVESTMENTS(1) Property Cash Square Occupancy MSA Count Investment NOI Feet % San Francisco, CA 71 $ 2,539,681 $ 47,535 3,821 97.9 San Diego, CA 30 870,446 14,727 2,085 94.6 Boston, MA 3 315,930 4,053 4
Slide 35: Life Science Lease Expirations and Tenants
Life Science As of March 31, 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 R
Slide 36: 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 December 31, 2018 6,488 $ 43.97 Acqu
Slide 37: Medical Office
Medical Office As of and for the quarter ended March 31, 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 38: Medical Office: Square Feet by Health System
Medical Office As of and for the quarter ended March 31, 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 F
Slide 39: Medical Office Lease Expirations and Same Property
Medical Office As of and for the quarter ended March 31, 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)
Slide 40: Other Wholly-owned
Other Wholly-owned As of and for the quarter ended March 31, 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 Be
Slide 41: Other Unconsolidated JVs
Other Unconsolidated JVs(1) As of and for the quarter ended March 31, 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 $ 2,335,593 $ 1,497,585 $ 258,945 $ 519,474 $ 50,013 $ 9,576 Joint
Slide 42: Other Unconsolidated JV Capital
Other Unconsolidated JV Capital Represents HCP's pro rata share of unconsolidated JVs for the quarter ended March 31, 2019, dollars in thousands UNCONSOLIDATED JV CAPITAL Three Months Ended March 31, 2019 FAD capital expenditures $ 1,172 Revenue enhancing capital expenditures 3,253 Tenant improvemen
Slide 43: Other CCRC JV
Other CCRC JV Dollars in thousands, except REVPOR CCRC JV 1Q18 2Q18 3Q18 4Q18 1Q19 Property count 15 15 15 15 15 Units 7,257 7,262 7,268 7,273 7,269 Occupancy % 86.4 85.8 85.5 85.7 85.8 REVPOR(1) $ 5,099 $ 5,132 $ 5,188 $ 5,206 $ 5,208 HCP's SHARE OF CCRC JV Investment $ 713,996 $ 718,920 $ 723,044
Slide 44: 2019 Guidance
(1) 2019 Guidance Projected full year 2019, dollars in millions, except per share amounts Full Year 2019 Guidance (May 1, 2019) Net income, FFO and FFO as Adjusted per Share Guidance Diluted earnings per common share $0.45 - $0.51 Diluted NAREIT FFO per common share $1.67 - $1.73 Diluted FFO as adju
Slide 45: 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 46: 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 47: Glossary
Glossary Net Debt* Real Estate Revenues* Enterprise Debt less the carrying amount of cash and cash equivalents as reported in our Includes rental related revenues, tenant recoveries, resident fees and services and income from consolidated financial statements and our pro rata share of cash and cash
Slide 48: 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 49: 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 March 31, 2019 Net income (loss) $ 64,990 Interest expense 49,327 Income tax expense (benefit) (3,458) Depreciation and amortization 131,951 Other depreciation and
Slide 50: Debt Ratios
Debt Ratios As of and for the quarter ended March 31, 2019, dollars in thousands ENTERPRISE DEBT AND NET DEBT March 31, 2019 Bank line of credit(1) $ 276,500 Term loans — Senior unsecured notes 5,260,622 Mortgage debt 137,525 Other debt 89,223 Consolidated Debt $ 5,763,870 HCP's share of unconsolida
Slide 51: 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 52: Forward-Looking Statements & Risk Factors
Sky Ridge III Forward-Looking Statements Lone Tree, CO & 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 Excha
Slide 53: Forward-Looking Statements & Risk Factors (continued)
Forward-Looking Statements East Mesa Mesa, AZ & Risk Factors (continued) including its lack of sole decision making authority and its reliance on its partners’ financial condition and continued cooperation; competition for the acquisition and financing of suitable healthcare properties as well as co
Slide 54: 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 54