Healthpeak Properties, Inc. · NYSE:DOC
Healthpeak Properties — HCP — Investor Presentation (November 2016)
18 slides from Healthpeak Properties's investor presentation, Nov 1, 2016
Slide 1: HCP's Near-Term Strategic Priorities
HCP’s Near-Term Strategic Priorities Substantial Progress towards Accomplishing Our Near-Term Goals HCP 3.0 Execute the Spin-off of the HCR ManorCare Portfolio Reduce and Improve Brookdale Concentration Improve Balance Sheet Metrics Become a Leader in Transparency and Clarity Establish the Next Gene
Slide 2: Who We Are Today
Who We Are Today Represents HCP’s preliminary 2017 Outlook provided on 11/1/16 for cash NOI plus interest income from debt investments. Other segment primarily consists of hospitals, U.K. real estate, and all debt investments. Private pay is defined as out-of-pocket or commercial insurance. Large, d
Slide 3: Premier Portfolio in Attractive Healthcare Markets
Improved lease coverage with announced Brookdale transactions(1) Added 6 new operators, diversifying our relationships 74% located in Top 50 NIC MSAs Premier Portfolio in Attractive Healthcare Markets 43% 83% located on-campus; 87% in Top 50 MSAs 95% affiliated with 200+ hospitals and healthcare sys
Slide 4: Brookdale Portfolio Transactions
Current HCP 3.0 Sale of Sale / Transition BKD NNN BKD NNN 64 of 25 Portfolio(2) Portfolio Properties Properties # of Properties 167 78 64 25 Located in Top 99 NIC Markets 74% 5% 79% 70% 61% Contractual Rent(3) $222M $121M $90M $11M % of Overall HCP 16% 6% 10% Property EBITDAR-to-Rent Coverage(4) 1.0
Slide 5: 2016 Guidance, Pro Forma Run Rate and 2017 Outlook
2016 Nov 1st Guidance (mid-point) 2016 Pro Forma Run Rate(1) 2017 Outlook (mid-point) NAREIT FFO per share $2.38 $1.58 $1.91 FFO as Adjusted per share $2.72 $1.92 $1.92 Cash NOI SPP 3.25% n/a 3.0% NOI SPP 2.2% n/a 2.0% Assumed timing of transactions: Spin 10/31/16 1/1/16 10/31/16 RIDEA II transactio
Slide 6: Bridge to 2016 Pro Forma Run Rate
Bridge to 2016 “Pro Forma Run Rate” Combined, these transactions generate gross proceeds totaling $3.3B to HCP and reduce annual income by $600M Based on the mid-point of the Company’s 2016 guidance on 11/1/16. Guidance reflects the Spin completion on 10/31/16 and RIDEA II transaction on 11/30/16, a
Slide 7: 2016 Run Rate to 2017 Outlook: Major Drivers Impacting FFO as Adjusted
2016 Run Rate to 2017 Outlook: Major Drivers Impacting FFO as Adjusted 2016 Run Rate represents the annualized, run-rate impact from the QCP Spin, sale of 64 Brookdale triple-net assets, and the RIDEA II transaction. Includes straight-line & above/below market rents, accretion on DFL investments and
Slide 8: Combined Sources and Use of Proceeds
Combined Sources and Use of Proceeds – Spin, RIDEA II, and Portfolio Sale of Brookdale 64 properties Revolver balance includes 2016 YTD debt maturities totaling $600 million ($200 million mortgage at 6.6% and $400 million unsecured bonds at 6.3%) at a blended 6.4%. Includes QCP spin costs (approxima
Slide 9: Projected Debt Maturity Schedule
Projected Debt Maturity Schedule(1) 4.1% weighted average interest rate 6.7 years weighted average maturity ($ in millions) We Will Have Addressed Substantially All Debt Maturities Through the End of 2018 As of 9/30/16, excluding revolver and other debt. Projected maturity schedule reflects $3.15 bi
Slide 10: Committed to a Strong Balance Sheet
Committed to a Strong Balance Sheet Preliminary Post Spin Targets at Announcement(1) 2017 Targets(2) General Targets Net Debt / EBITDA ~6.5x Low to mid-6x 5.5x-6.0x Financial Leverage 45% 43%-44% <40% Fixed Charge Coverage 3.75x 3.6x-3.8x >3.5x Top 3 Tenant Concentration(3) ~40% 35%-40% 30-35% Post-
Slide 11: What Differentiates HCP 3.0 (Conclusion)
Investment plan emphasizing prudent capital allocation and accretive growth objectives Improvement in credit metrics over time to regain Baa1/BBB+ ratings Best-in-class disclosures and transparency What Differentiates HCP 3.0 High quality portfolio reinforcing stability and organic growth, with 94%
Slide 12: What Differentiates HCP 3.0
What Differentiates HCP 3.0 Y High quality portfolio reinforcing stability and organic growth, with 94% private-pay revenue sources, strong coverage levels on triple-net portfolio. and improved tenant concentration Y’ strong and improving investment grade balance sheet with ample liquidity and no si
Slide 13: Assumptions for 2016 Guidance & 2017 Outlook
Assumptions for 2016 Guidance & 2017 Outlook APPENDIX 2016 Guidance 2017 Outlook YoY Cash NOI SPP Growth(1) 2.75%-3.75% 2.5%-3.5% YoY NOI SPP Growth(1) 1.7%-2.7% 1.5%-2.5% G&A Expense $103M-$105M ($89M-$91M excl. severance charges) $83M-$87M Interest Expense $463M-$467M $305M-$315M Dispositions $1.3
Slide 14: Full Year 2016 & 2017 Same Property Performance
Full Year 2016 & 2017 Same Property Performance Represents forecasted same-store cash NOI growth at the mid-point, excluding QCP for 2016. Cash NOI SPP Growth(1) Our Diversified Portfolio is Projected to Generate Same-Store Cash NOI Growth in 2017 of 3%, Led by Continued Strength in our SHOP Platfor
Slide 15: Significant Value Creation from Development Pipeline
Significant Value Creation from Development Pipeline(1) Reflects committed ground-up development projects as of 9/30/16, and the third phase of the Cove commenced on 10/31/16. Based on executed leases at Phases I and II as of 9/30/16 (does not include Phase III which was initiated on 10/31/16). Prel
Slide 16: The Cove at Oyster Point Development
The Cove at Oyster Point Development Premier Class A Life Science development project totaling one million sq. ft. at the gateway to South San Francisco, where overall Life Science vacancy is below 3% Phase I is 73% leased; 247,000 sq. ft. in two buildings (opened 3Q 2016) Phase II is 50% pre-leased
Slide 17: Disclaimer and Forward-Looking Statements
This presentation is being presented solely for your information, is subject to change and speaks only as of the date hereof. This presentation and comments made by management do not constitute an offer to sell or the solicitation of an offer to buy any securities of HCP or any investment interest i
Slide 18: Definitions
Definitions Funds From Operations (“FFO”) We believe FFO applicable to common shares, diluted FFO applicable to common shares, and diluted FFO per common share are important supplemental non-GAAP measures of operating performance for a REIT. Because the historical cost accounting convention used for