Healthpeak Properties, Inc. · NYSE:DOC
Healthpeak Properties — HCP — Q1 2018 Earnings Presentation
56 slides from Healthpeak Properties's earnings presentation, May 3, 2018
Slide 1: Earnings Release and Supplemental Report
Earnings Release and Supplemental Report first quarter 2018 Cypress MOB Cypress, TX 1
Slide 2: Table of Contents
Earnings Release 3 Overview 8 Consolidated Financial Statements 9 Portfolio Summary 13 Same Property Portfolio 15 Capitalization and Indebtedness 16 Investment Summary 19 Developments and Redevelopments 20 Capital Expenditures 22 Portfolio Diversification 23 Expirations and Maturities 25 Triple-net
Slide 3: HCP Announces Results for the Quarter Ended March 31, 2018
HCP Announces Results for the Quarter Ended March 31, 2018 IRVINE, CA, May 3, 2018 -- HCP, Inc. (NYSE:HCP) announced results for the first quarter ended March 31, 2018. FIRST QUARTER 2018 FINANCIAL PERFORMANCE AND RECENT HIGHLIGHTS – Net income, FFO and FFO as adjusted per common share were $0.08, $
Slide 4: Same Property Portfolio Operating Summary
SAME PROPERTY PORTFOLIO OPERATING SUMMARY The tables below outline the year-over-year three-month SPP Cash NOI growth and the components of our senior housing operating portfolio ("SHOP") SPP Cash NOI growth for the first quarter: Three-Month SPP Cash NOI Growth Components of SHOP SPP Cash NOI Growt
Slide 5: Development Updates
DEVELOPMENT UPDATES HAYDEN LEASING AND DEVELOPMENT Since acquiring the Hayden Research Campus ("Hayden") in December 2017, leasing velocity has been strong with the two-building life science campus now 97% leased, up from 66% at the time of acquisition. The new tenants are a combination of venture-b
Slide 6: 2018 Guidance
2018 GUIDANCE For full year 2018, we are reaffirming the following guidance ranges: • Net income per share of $0.79 to $0.85 • FFO per share of $1.73 to $1.79 • FFO as adjusted per share of $1.77 to $1.83 • SPP Cash NOI to increase 0.25% to 1.75% These estimates do not reflect the potential impact f
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: Overview
The Numbers Overview (1) As of and for the quarter ended March 31, 2018, dollars, square feet and shares in thousands, except per share data Full Year 2018 Guidance 1Q18 (May 3, 2018)(2) (1) Reconciliations, definitions and important discussions Financial Metrics regarding the usefulness and limitat
Slide 9: Consolidated Balance Sheets
HCP, Inc. Consolidated Balance Sheets In thousands, except share and per share data (unaudited) March 31, 2018 December 31, 2017 Assets Real estate: Buildings and improvements $ 11,532,338 $ 11,239,732 Development costs and construction in progress 344,948 447,976 Land 1,808,210 1,785,865 Accumulate
Slide 10: Consolidated Statements of Operations
HCP, Inc. Consolidated Statements of Operations In thousands, except per share data (unaudited) Three Months Ended March 31, 2018 2017 Revenues: Rental and related revenues $ 279,578 $ 286,218 Tenant recoveries 37,174 33,675 Resident fees and services 142,814 140,232 Income from direct financing lea
Slide 11: Funds From Operations
HCP, Inc. Funds From Operations In thousands, except per share data (unaudited) Three Months Ended March 31, 2018 2017 Net income (loss) applicable to common shares $ 39,841 $ 460,375 Real estate related depreciation and amortization 143,250 136,554 Real estate related depreciation and amortization
Slide 12: Funds Available for Distribution
HCP, Inc. Funds Available for Distribution In thousands (unaudited) Three Months Ended March 31, 2018 2017 FFO as adjusted applicable to common shares $ 227,352 $ 240,172 Amortization of deferred compensation(1) 3,420 3,765 Amortization of deferred financing costs 3,336 3,858 Straight-line rents (10
Slide 13: Portfolio Summary
Portfolio Summary As of and for the quarter ended March 31, 2018, dollars in thousands Property Portfolio Portfolio Private Count Age Investment Income Pay %(1) PORTFOLIO INCOME Wholly Owned Property Portfolio Senior housing triple-net 181 20 $ 3,572,999 $ 71,379 93.0 UK 3% Unconsolidated SHOP 100 2
Slide 14: NOI and Cash NOI Summary
NOI and Cash NOI Summary For the quarter ended March 31, 2018, dollars in thousands NOI SUMMARY Rental and Operating Operating Revenues Expenses NOI Wholly-Owned Senior housing triple-net $ 74,289 $ (1,045) $ 73,243 SHOP 144,670 (101,746) 42,925 Life science 99,622 (21,809) 77,813 Medical office 123
Slide 15: Same Property Portfolio
Same Property Portfolio As of March 31, 2018, dollars in thousands SAME PROPERTY PORTFOLIO RECONCILIATION Senior Housing Life Medical Triple-net SHOP Science Office Other Total Total Property Count 181 100 131 254 167 833 Unconsolidated JVs(1) — — — — (84) (84) Acquisitions — (2) (4) (14) — (20) Ass
Slide 16: Capitalization
Capitalization Dollars and shares in thousands, except price per share data TOTAL CAPITALIZATION March 31, 2018 Shares Value Total Value Common stock (NYSE: HCP) 469,725 $ 23.23 $ 10,911,712 Convertible partnership (DownREIT) units 6,617 23.23 153,713 Total Market Equity 476,342 $ 11,065,425 Consoli
Slide 17: Indebtedness and Ratios
Indebtedness and Ratios As of March 31, 2018, 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(2) Amounts Rates %(3) Amounts
Slide 18: Indebtedness and Ratios
Indebtedness and Ratios As of March 31, 2018, dollars in thousands, includes HCP's pro rata share of unconsolidated JVs DEBT STRUCTURE Weighted Average Balance % of Total Interest Rate Years to Maturity Secured Fixed rate $ 185,912 2 4.18% 16.1 Floating rate 126,545 2 3.92% 4.7 Combined $ 312,457 4
Slide 19: Investment Summary
Investment Summary For the three months ended March 31, 2018, dollars and square feet in thousands INVESTMENT SUMMARY Three Months Ended March 31, 2018 Hayden development entitlements(1) $ 21,390 (2) Noncontrolling interest in RIDEA I JV 62,632 (1) In March 2018, we acquired the rights to develop a
Slide 20: Developments
Developments As of March 31, 2018, dollars and square feet in thousands DEVELOPMENT PROJECTS IN PROCESS Construction Property in Process Cost to Total at Project MSA Property Type Count ("CIP") Complete Completion Wholly-Owned Ridgeview San Diego, CA Life science 3 $ 49,937 $ 12,063 $ 62,000 The Cov
Slide 21: Redevelopments and Land Held for Development
Redevelopments and Land Held for (1) Development As of March 31, 2018, dollars and square feet in thousands REDEVELOPMENT PROJECTS IN PROCESS Incremental Costs Redevelopments Property Property Removed from Placed in Cost to Total at Project Estimated Project MSA Type Count Operations(2) Service CIP
Slide 22: Capital Expenditures
Capital Expenditures First Quarter For the quarter ended March 31, 2018, dollars in thousands, except per unit/square foot Senior Housing Medical Triple-net SHOP Life Science Office Other Total Wholly-Owned Recurring capital expenditures $ 63 $ 3,649 $ 397 $ 2,126 $ — $ 6,236 Tenant improvements - 2
Slide 23: Portfolio Diversification
Portfolio Diversification As of and for the quarter ended March 31, 2018, dollars in thousands PORTFOLIO INCOME BY MSA Property Senior Housing Medical MSA Count Triple-net SHOP Life Science Office Other Total % of Total San Francisco, CA 78 $ 2,557 $ — $ 47,888 $ 775 $ — $ 51,220 16 Dallas, TX 42 2,
Slide 24: Portfolio Diversification
Portfolio Diversification As of and for the quarter ended March 31, 2018, 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 25: Expirations and Maturities
Expirations and Maturities As of March 31, 2018, dollars in thousands EXCLUDES PURCHASE AND PREPAYMENT OPTIONS Annualized Base Rent Senior Housing Medical Interest Year Total % of Total Triple-net Life Science Office Other Income 2018(1) $ 77,753 7 $ 6,226 $ 10,772 $ 60,755 $ — $ — 2019 87,902 8 2,3
Slide 26: Triple-Net Master Lease Profile
(1)(2) Triple-Net Master Lease Profile INVESTMENT TYPE 2.1% 0x x .0 25 13 2. Senior Housing LOWER RISK FACILITY EBITDAR CFC (TRAILING 12 MONTHS ENDED 12/31/2017) No Corporate Guaranty 0x 2.0 0.6% Other 0.2% 1.3% 0.4% % Percent of Total Cash NOI x and Interest Income 75 1. x 50 1. 0.1% 1.7% 1.6% 1.0%
Slide 27: Senior Housing Triple-net
Senior Housing Triple-net As of and for the quarter ended March 31, 2018, 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 179 $ 3,319,810 $ 68,234 17,2
Slide 28: Senior Housing Triple-net Same Property Portfolio
Senior Housing Triple-net Same Property Portfolio Dollars in thousands, except REVPOR 1Q17 2Q17 3Q17 4Q17 1Q18 Property count 179 179 179 179 179 Investment $ 3,500,167 $ 3,503,104 $ 3,511,361 $ 3,520,582 $ 3,524,509 Units 18,124 18,123 18,126 18,123 18,123 Occupancy % 87.7 87.1 86.2 86.4 86.4 REVPO
Slide 29: Senior Housing Triple-net New Supply
Senior Housing Triple-net New Supply As of and for the quarter ended March 31, 2018, dollars in thousands NEW SUPPLY ANALYSIS HCP Portfolio 5-Mile Radius(1) % of Cash NOI 5-Year 80+ Triple- Properties/ Exposed Population 80+ Qualified Median Median net Cash Units Under to New Growth % Penetration Ca
Slide 30: SHOP
SHOP As of and for the quarter ended March 31, 2018, dollars in thousands, except REVPOR INVESTMENTS Property REVPOR Count Investment Cash NOI Units Occupancy % SHOP Operator Brookdale 68 $ 1,930,870 $ 32,857 10,275 86.3 $ 3,932 Atria 14 285,290 5,629 1,820 86.1 3,979 Senior Lifestyle Corp. 7 196,57
Slide 31: SHOP MSA
SHOP MSA As of and for the quarter ended March 31, 2018, 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 $ 335,185 $ 7,192 17.4 87 1,962 93.3 $ 6,328 $ 3,150 Miami, FL 276,278 5,153
Slide 32: SHOP Same Property Portfolio
SHOP Same Property Portfolio Dollars in thousands, except REVPOR 1Q17 2Q17 3Q17 4Q17 1Q18 Property count 69 69 69 69 69 Investment $ 1,985,065 $ 1,992,840 $ 1,994,535 $ 2,004,622 $ 2,010,790 Units 10,321 10,322 10,323 10,321 10,317 Occupancy % 88.4 86.9 86.4 87.0 86.5 REVPOR SHOP $ 3,974 $ 3,990 $ 3
Slide 33: SHOP New Supply
SHOP New Supply As of and for the quarter ended March 31, 2018, dollars in thousands NEW SUPPLY ANALYSIS HCP Portfolio 5-Mile Radius(1) Cash NOI 5-Year 80+ % of Properties/ Exposed Population 80+ Qualified Median SHOP Units Under to New Growth % Penetration Care Household Median Unemploy- MSA Units
Slide 34: Life Science
Life Science As of and for the quarter ended March 31, 2018, dollars and square feet in thousands INVESTMENTS(1) Property Cash Square Occupancy MSA Count Investment NOI Feet % San Francisco, CA/San Jose, CA 85 $ 3,048,690 $ 56,613 4,948 95.9 San Diego, CA 28 753,627 12,678 1,925 90.8 (2) Boston, MA
Slide 35: Life Science
Life Science As of March 31, 2018, dollars and square feet in thousands SELECTED LEASE EXPIRATION DATA (NEXT 5 YEARS)(1) San Francisco / Total San Jose San Diego Boston Remaining Leased Square Annualized Square Annualized Square Annualized Square Annualized Square Annualized Year Feet % Base Rent %
Slide 36: Life Science
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, 2017 7,237 $ 43.17 Deve
Slide 37: Medical Office
Medical Office As of and for the quarter ended March 31, 2018, dollars and square feet in thousands PORTFOLIO BY MARKET Square Feet On-campus(1) Off-campus(2) Total Property Occupancy MSA Count Investment Cash NOI % Multi-tenant Single-tenant Multi-tenant Single-tenant Multi-tenant Single-tenant % o
Slide 38: Medical Office
Medical Office As of and for the quarter ended March 31, 2018, 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
Medical Office As of and for the quarter ended March 31, 2018, dollars and square feet in thousands SELECTED LEASE EXPIRATION DATA (NEXT 5 YEARS) Total On-Campus Off-Campus Leased Annualized Annualized Annualized Year Square Feet % Base Rent % Square Feet Base Rent Square Feet Base Rent 2018(1) 2,50
Slide 40: Other Wholly-owned
Other Wholly-owned As of and for the quarter ended March 31, 2018, dollars in thousands LEASED PROPERTIES Facility Facility Property Occupancy EBITDARM EBITDAR Type/Operator Count Investment Cash NOI Beds %(1) CFC(1) CFC(1) Hospitals Acute care 4 $ 342,183 $ 13,433 1,438 44.5 9.04x 8.49x Remaining 1
Slide 41: Other Same Property Portfolio - Hospitals
Other Same Property Portfolio - Wholly-owned As of and for the quarter ended March 31, 2018, dollars in thousands HOSPITALS 1Q17 2Q17 3Q17 4Q17 1Q18 (1) Certain operators in our hospital portfolio are not required under their respective leases to provide Property count 14 14 14 14 14 operational dat
Slide 42: Other Same Property Portfolio - Total Other
Other Same Property Portfolio - Wholly-owned As of and for the quarter ended March 31, 2018, dollars in thousands TOTAL OTHER(1) 1Q17 2Q17 3Q17 4Q17 1Q18 Property count 76 76 76 76 76 Investment $ 922,617 $ 937,093 $ 949,984 $ 953,513 $ 969,707 Rental and Operating Revenues $ 28,777 $ 28,659 $ 28,95
Slide 43: Other Unconsolidated JVs
Other Unconsolidated JVs(1) As of and for the quarter ended March 31, 2018, dollars and square feet in thousands Other SHOP Medical SELECTED FINANCIAL DATA AT 100% Total CCRC JV RIDEA II JV JVs Life Science Office Remaining Joint ventures' Investment $ 2,913,758 $ 1,457,135 $ 1,027,917 $ 212,320 $ 1
Slide 44: Other Unconsolidated JV Capital
Other Unconsolidated JV Capital Represents HCP's pro rata share of unconsolidated JVs for the quarter ended March 31, 2018, dollars in thousands Three Months Ended March 31, 2018 FAD capital expenditures $ 2,776 Revenue enhancing capital expenditures 2,797 Development 3,694 Redevelopment 150 Capital
Slide 45: Other CCRC JV
Other CCRC JV Dollars in thousands, except REVPOR CCRC JV 1Q17 2Q17 3Q17 4Q17 1Q18 Property count 15 15 15 15 15 Units 7,198 7,245 7,249 7,250 7,257 Occupancy % 85.7 85.2 84.9 85.7 86.4 (1) REVPOR $ 5,060 $ 5,065 $ 5,094 $ 5,153 $ 5,099 HCP's SHARE OF CCRC JV Investment $ 694,762 $ 700,776 $ 705,554
Slide 46: 2018 Guidance
2018 Guidance Projected full year 2018, dollars in millions, except per share amounts (1) The current guidance has not changed from the February 13, 2018 guidance, with the exception of net dispositions, which were modified to reflect the pending U.K. JV. See footnote (5) below for further discussio
Slide 47: Glossary
Glossary Adjusted Fixed Charge Coverage* Consolidated Secured Debt Adjusted EBITDA divided by Fixed Charges. Adjusted Fixed Charge Coverage is a supplemental Mortgage and other debt secured by real estate, as reported in our consolidated financial measure of liquidity and our ability to meet interes
Slide 48: Glossary
Glossary Enterprise Secured Debt* Financial Leverage* Consolidated Secured Debt plus our pro rata share of mortgage debt from our unconsolidated JVs. Enterprise Debt divided by Enterprise Gross Assets. Financial Leverage is a supplemental measure Enterprise Secured Debt is a supplemental measure of
Slide 49: Glossary
Glossary Metropolitan Statistical Areas (“MSA”) Pooled Leases Metropolitan Statistical Areas are geographic entities delineated by the Office of Management and Two or more leases to the same operator/tenant or their subsidiaries under which their obligations Budget for use by Federal Statistical age
Slide 50: Glossary
Glossary Same Property Portfolio (“SPP”)* Units/Square Feet/Beds SPP NOI and Adjusted (Cash) NOI information allows us to evaluate the performance of our property Senior housing facilities are measured in available units (e.g., studio, one or two bedroom units). portfolio under a consistent populati
Slide 51: Debt Ratios
Adjusted EBITDA and Adjusted Debt Ratios Fixed Charge Coverage Dollars in thousands Three Months Ended March 31, 2018 Net income $ 43,237 Interest expense 75,102 Income tax expense (benefit) (5,336) Depreciation and amortization 143,250 Other depreciation and amortization 1,296 HCP’s share of uncons
Slide 52: Debt Ratios
Debt Ratios As of and for the quarter ended March 31, 2018, dollars in thousands ENTERPRISE DEBT AND NET DEBT March 31, 2018 Bank line of credit(1) $ 1,092,357 (2) Term loan 236,878 Senior unsecured notes 6,398,976 Mortgage debt 143,524 Other debt 93,856 Consolidated Debt $ 7,965,591 HCP's share of
Slide 53: Company Information
COMPANY Information BOARD OF DIRECTORS BRIAN G. CARTWRIGHT DAVID B. HENRY Chairman of the Board, HCP, Inc. Former Vice Chairman and Chief Executive Officer, Former General Counsel Kimco Realty Corporation U.S. Securities and Exchange Commission LYDIA H. KENNARD THOMAS M. HERZOG President and Chief E
Slide 54: Forward-Looking Statements & Risk Factors
Hayden Forward-Looking Statements Boston, MA & 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 Exchange Act of
Slide 55: Forward-Looking Statements & Risk Factors (continued)
Hayden Forward-Looking Statements Boston, MA & Risk Factors (continued) and its tenants, operators and borrowers from current and future litigation matters, including the possibility of larger than expected litigation costs, adverse results and related developments; the effect on the Company’s tenan
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