Healthpeak Properties, Inc. · NYSE:DOC
Healthpeak Properties — HCP — Q3 2017 Earnings Presentation
60 slides from Healthpeak Properties's earnings presentation, Nov 2, 2017
Slide 1: Earnings Release and Supplemental Report third quarter 2017
Earnings Release and Supplemental Report third quarter 2017 The Cove South San Francisco, CA 1
Slide 2: Table of Contents
Earnings Release 3 Overview 8 Consolidated Financial Statements 9 Portfolio Summary 13 Same Property Portfolio 15 Capitalization and Debt 16 Investment Summary - Acquisitions, Fundings & Dispositions 19 Developments and Redevelopments 21 Capital Expenditures 23 Portfolio Diversification 25 Expiratio
Slide 3: HCP Announces Results for the Quarter Ended September 30, 2017
HCP Announces Results for the Quarter Ended September 30, 2017 IRVINE, Calif., Nov. 2, 2017 /PRNewswire/ -- HCP, Inc. (NYSE:HCP) announced results for the quarter ended September 30, 2017. THIRD QUARTER 2017 AND RECENT HIGHLIGHTS – EPS, FFO and FFO as adjusted per share, were ($0.02), $0.33 and $0.4
Slide 4: Same Property Portfolio Operating Summary
SAME PROPERTY PORTFOLIO OPERATING SUMMARY The table below outlines the three-month same property portfolio operating results for the quarter: Year-Over-Year Occupancy SPP Growth 3Q17 3Q16 NOI Cash NOI Senior housing triple-net 85.5% 87.1% 3.0% 2.7% (1) Senior housing operating portfolio ("SHOP") 86.
Slide 5: Acquisitions, Dispositions, Development, Balance Sheet and New Credit Facility
• In August, we acquired 6000 Shoreline Court, a 139,000 square foot life science office building in South San Francisco, California for $64 million. 6000 Shoreline is adjacent to our Sierra Point development site. DISPOSITIONS During the third quarter, we sold two triple-net senior housing assets l
Slide 6: Sustainability and Outlook
SUSTAINABILITY HCP’s leadership in Environmental, Social and Governance (ESG) standards was again recognized by two influential ESG benchmarking institutions, the Dow Jones Sustainability Indices and Global Real Estate Sustainability Benchmark (GRESB). HCP was named to the Dow Jones Sustainability I
Slide 7: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Secti
Slide 8: Overview
The Numbers Overview (1) As of and for the quarter ended September 30, 2017, dollars, square feet and shares in thousands, except per share data Full Year 2017 Guidance 3Q17 YTD (November 2, 2017) Financial Metrics (1) Reconciliations, definitions and important discussions regarding the usefulness a
Slide 9: Unaudited Consolidated Balance Sheets
HCP, Inc. Unaudited Consolidated Balance Sheets In thousands, except share and per share data September 30, 2017 December 31, 2016 Assets Real Estate: Buildings and improvements $ 11,052,578 $ 11,692,654 Development costs and construction in progress 429,459 400,619 Land 1,752,890 1,881,487 Accumula
Slide 10: Unaudited Consolidated Statements of Operations
HCP, Inc. Unaudited Consolidated Statements of Operations In thousands, except per share data Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Revenues: Rental and related revenues $ 266,109 $ 290,280 $ 816,147 $ 872,828 Tenant recoveries 36,860 34,809 105,794 99,
Slide 11: Unaudited Funds From Operations
HCP, Inc. Unaudited Funds From Operations In thousands, except per share data Three Months Ended Nine Months Ended (1) Other depreciation and amortization includes DFL September 30, September 30, depreciation and lease incentive amortization (reduction 2017 2016 2017 2016 of straight-line rents) for
Slide 12: Unaudited Funds Available for Distribution
HCP, Inc. Unaudited Funds Available for Distribution In thousands Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 FFO as adjusted applicable to common shares $ 227,769 $ 336,513 $ 692,726 $ 1,006,166 Amortization of deferred compensation(1) 3,237 3,389 10,329 12,
Slide 13: Portfolio Summary
Portfolio Summary As of and for the quarter ended September 30, 2017, dollars in thousands Cash NOI and Property Interest Private Count Age Investment Income Pay %(1) Property Portfolio CASH NOI AND INTEREST INCOME Senior housing triple-net 204 19 $ 3,801,465 $ 75,686 92.0 SHOP 83 23 2,348,506 39,18
Slide 14: Portfolio Summary: NOI, Cash NOI and Interest Income
Portfolio Summary For the quarter ended September 30, 2017, dollars in thousands NOI, CASH NOI AND INTEREST INCOME Rental and Operating Operating Interest Cash NOI and Revenues Expenses NOI(1) Cash NOI(1) Income Interest Income Wholly-Owned Senior housing triple-net $ 77,220 $ (934) $ 76,286 $ 75,68
Slide 15: Same Property Portfolio
Same Property Portfolio As of September 30, 2017, dollars in thousands, includes HCP's pro rata share of unconsolidated JVs Senior housing Life Medical SAME PROPERTY PORTFOLIO RECONCILIATION triple-net SHOP science office Other Total Total Property Count 204 158 131 245 80 818 Acquisitions — (7) (3)
Slide 16: Capitalization
Capitalization Dollars and shares in thousands, except price per share data TOTAL CAPITALIZATION September 30, 2017 Shares Value Total Value Common stock (NYSE: HCP) 469,035 $ 27.83 $ 13,053,244 Convertible partnership (DownREIT) units 6,629 27.83 184,485 Total Market Equity 475,664 $ 13,237,729 Con
Slide 17: Indebtedness and Ratios
Indebtedness and Ratios As of September 30, 2017, dollars in thousands DEBT MATURITIES AND SCHEDULED PRINCIPAL REPAYMENTS (AMORTIZATION) Senior Unsecured HCP's Share of Notes Mortgage Debt Unconsolidated JV Debt Total Debt Bank Line of Consolidated Credit(1) Term Loan(2) Amounts Rates %(3) Amounts R
Slide 18: Indebtedness and Ratios: Debt Structure and Covenants
Indebtedness and Ratios As of September 30, 2017, 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 $ 232,537 3 4.45% 13.6 Floating rate 73,641 1 3.96% 2.1 Combined $ 306,178
Slide 19: Investment Summary: Acquisitions, Fundings and Repayments
Investment Summary Acquisitions, Fundings and Repayments For the three and nine months ended September 30, 2017, dollars and square feet in thousands INVESTMENT SUMMARY Three Months Ended Nine Months Ended September 30, 2017 September 30, 2017 Acquisitions $ 112,000 $ 138,100 Development fundings 64
Slide 20: Investment Summary: Dispositions and Assets Held for Sale
Investment Summary Dispositions and Assets Held for Sale For the quarter ended September 30, 2017, dollars and square feet in thousands DISPOSITIONS Trailing Yield(1) Date Capacity Property Count Property Type Sales Price NOI Cash NOI Salt Lake City, UT January 324 Sq. Ft. 4 Life science $ 75,750 Me
Slide 21: Developments
Developments As of September 30, 2017, dollars and square feet in thousands DEVELOPMENT PROJECTS IN PROCESS Property Placed Construction in Cost to Total at (1) Cash NOI for assets Name of Project MSA Segment Count in Service(1) Process ("CIP") Complete Completion placed in service was Wholly-Owned
Slide 22: Redevelopments and Land Held for Development
Redevelopments and (1) Land Held for Development As of September 30, 2017, dollars and square feet in thousands REDEVELOPMENT PROJECTS IN PROCESS Incremental Costs Investment Placed Property Placed in in Cost to Total at Project Estimated Name of Project MSA Segment Count Redevelopment(2) Service CI
Slide 23: Capital Expenditures Third Quarter
Capital Expenditures Third Quarter For the quarter ended September 30, 2017, dollars in thousands, except per unit/square foot Senior Housing Medical Triple-net SHOP Life Science Office Other Total Wholly-Owned Recurring capital expenditures $ 604 $ 4,554 $ 1,064 $ 4,456 $ — $ 10,678 Tenant improvem
Slide 24: Capital Expenditures Year-to-Date
Capital Expenditures Year-to-Date For the nine months ended September 30, 2017, dollars in thousands, except per unit/square foot Senior Housing Medical Triple-net SHOP Life Science Office Other Total Wholly-Owned Recurring capital expenditures $ 2,103 $ 13,985 $ 2,773 $ 10,060 $ 132 $ 29,053 Tenant
Slide 25: Portfolio Diversification
Portfolio Diversification As of and for the quarter ended September 30, 2017, dollars in thousands, includes HCP's pro rata share of unconsolidated JVs CASH NOI AND INTEREST INCOME BY MSA Property Senior Housing Medical MSA Count Triple-net SHOP Life Science Office Other Total % of Total San Francis
Slide 26: Expirations and Maturities
Expirations and Maturities As of September 30, 2017, dollars in thousands, includes HCP's pro rata share of unconsolidated JVs EXCLUDES PURCHASE AND PREPAYMENT OPTIONS Annualized Base Rent Senior Housing Medical Interest Year Total % of Total Triple-net Life Science Office Other Income 2017(1) $ 39,
Slide 27: Triple-Net Master Lease Profile
Triple-Net Master Lease (1) Profile INVESTMENT TYPE 1.7% 0x x 3.0 .25 Senior Housing 1 2 LOWER RISK FACILITY EBITDAR CFC (TRAILING 12 MONTHS ENDED 06/30/2017) Other 0x 2.0 No Corporate Guaranty 0.5% 0.1% 1.1% Share of HCP Cash NOI 0.4% % x and Interest Income 75 1. x 50 1. 0.9% 1.6% 1.3% 2.2% (3) (2
Slide 28: Senior Housing Triple-net
Senior Housing Triple-net As of and for the quarter ended September 30, 2017, dollars in thousands, except REVPOR Facility Facility Property Occupancy REVPOR EBITDARM EBITDAR Property Portfolio Count Investment Cash NOI Units % Triple-Net CFC CFC Assisted living 170 $ 2,836,764 $ 53,971 14,489 85.6
Slide 29: Senior Housing Triple-net Same Property Portfolio
Senior Housing Triple-net Dollars in thousands, except REVPOR Same Property Portfolio 3Q16 4Q16 1Q17 2Q17 3Q17 Property count 201 201 201 201 201 Investment $ 3,773,786 $ 3,782,383 $ 3,789,422 $ 3,792,615 $ 3,778,759 Units 20,060 20,043 20,039 20,038 20,041 Occupancy % 87.1 87.1 86.8 86.3 85.5 REVPO
Slide 30: Senior Housing Triple-net New Supply - Assisted Living
Senior Housing Triple-net As of and for the quarter ended September 30, 2017, dollars in thousands New Supply - Assisted Living NEW SUPPLY ANALYSIS HCP Portfolio 5-Mile Radius(1) % of Cash NOI 5-Year 80+ Triple- Properties/ Exposed Population 75+ Qualified Median net Cash Units Under to New Growth %
Slide 31: Senior Housing Triple-net New Supply - Independent Living & CCRC
Senior Housing Triple-net As of and for the quarter ended September 30, 2017, dollars in thousands New Supply - Independent Living & CCRC NEW SUPPLY ANALYSIS HCP Portfolio 5-Mile Radius(1) % of Cash NOI 5-Year 75+ Triple- Properties/ Exposed Population 75+ Qualified Median net Cash Units Under to Ne
Slide 32: SHOP
SHOP As of and for the quarter ended September 30, 2017, dollars in thousands, except REVPOR INVESTMENTS(1) Property REVPOR Count Investment Cash NOI Units Occupancy % SHOP Wholly-Owned AL 53 $ 965,486 $ 13,823 5,258 83.8 $ 4,421 IL 30 1,356,795 24,452 6,703 88.7 3,545 CCRC 1 26,225 909 244 87.9 7,5
Slide 33: SHOP MSA
SHOP MSA As of and for the quarter ended September 30, 2017, dollars in thousands, except REVPOR, includes HCP's pro rata share of unconsolidated JVs OPERATING PORTFOLIO METRICS Units(1) REVPOR SHOP(1) % of MSA Investment Cash NOI Cash NOI AL IL CCRC Occupancy % AL IL CCRC Tampa, FL $ 323,979 $ 7,08
Slide 34: SHOP Trend
SHOP Trend Dollars in thousands, except REVPOR, includes HCP's pro rata share of unconsolidated JVs TOTAL OPERATING PORTFOLIO 3Q16 4Q16 1Q17(1) 2Q17 3Q17 Property count 143 152 153 153 156 Investment $ 3,831,503 $ 3,986,662 $ 3,481,155 $ 3,500,131 $ 3,533,382 Units 24,440 25,407 25,472 25,484 25,674
Slide 35: SHOP Same Property Portfolio
SHOP Same Property Portfolio Dollars in thousands, except REVPOR, includes HCP's pro rata share of unconsolidated JVs TOTAL SHOP(1)(2) 3Q16 4Q16 1Q17 2Q17 3Q17 Property count 122 122 122 122 122 Investment $ 2,894,083 $ 2,911,876 $ 2,922,967 $ 2,936,979 $ 2,941,905 Units 22,104 22,123 22,094 22,135
Slide 36: SHOP CCRC JV Same Property Portfolio
SHOP CCRC JV Same Property Portfolio(1)(2) Dollars in thousands, except REVPOR, includes HCP's pro rata share of unconsolidated JVs CCRC JV 3Q16 4Q16 1Q17 2Q17 3Q17 Property count 15 15 15 15 15 Investment $ 685,466 $ 691,408 $ 694,762 $ 700,776 $ 705,554 Units 7,175 7,193 7,198 7,245 7,249 Occupanc
Slide 37: SHOP New Supply - Assisted Living
SHOP New Supply - Assisted Living As of and for the quarter ended September 30, 2017, dollars in thousands, includes HCP's pro rata share of unconsolidated JVs NEW SUPPLY ANALYSIS HCP Portfolio 5-Mile Radius(1) Cash NOI 5-Year 80+ % of Properties/ Exposed Population 75+ Qualified Median 75+ SHOP Uni
Slide 38: SHOP New Supply - Independent Living & CCRC
SHOP New Supply - Independent Living & CCRC As of and for the quarter ended September 30, 2017, dollars in thousands, includes HCP's pro rata share of unconsolidated JVs NEW SUPPLY ANALYSIS HCP Portfolio 5-Mile Radius(1) Cash NOI 5-Year 75+ % of Properties/ Exposed Population 75+ Qualified Median 75
Slide 39: Life Science
Life Science As of and for the quarter ended September 30, 2017, dollars and square feet in thousands, includes HCP's pro rata share of unconsolidated JVs INVESTMENTS(1) Property Cash Square Occupancy MSA Count Investment NOI Feet % Wholly-Owned San Francisco/San Jose, CA 83 $ 2,880,179 $ 52,918 4,8
Slide 40: Life Science Lease Expirations and Tenant Concentration
Life Science As of September 30, 2017, dollars and square feet in thousands, includes HCP's pro rata share of unconsolidated JVs SELECTED LEASE EXPIRATION DATA (NEXT 5 YEARS)(1) San Francisco / Total San Jose San Diego Remaining Leased Square Annualized Square Annualized Square Annualized Square Ann
Slide 41: Life Science Leasing Activity
Life Science Square feet in thousands, includes unconsolidated JVs 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 June 30
Slide 42: Medical Office
Medical Office As of and for the quarter ended September 30, 2017, dollars and square feet in thousands, includes HCP's pro rata share of unconsolidated JVs PORTFOLIO BY MARKET(1) Square Feet On-campus(2) Off-campus(3) Total Property Occupancy MSA Count Investment Cash NOI % Multi-tenant Single-tena
Slide 43: Medical Office Square Feet by Health System
Medical Office As of and for the quarter ended September 30, 2017, square feet in thousands, includes HCP's pro rata share of unconsolidated JVs SQUARE FEET BY HEALTH SYSTEM Square Feet Directly Leased by Health System Health System Credit % of Annualized Health System Rank(1) Rating On-Campus Ancho
Slide 44: Medical Office Lease Expirations and Same Property Portfolio
Medical Office As of and for the quarter ended September 30, 2017, dollars and square feet in thousands, includes HCP's pro rata share of unconsolidated JVs SELECTED LEASE EXPIRATION DATA (NEXT 5 YEARS) Total On-Campus Off-Campus Leased Annualized Annualized Annualized Year Square Feet % Base Rent %
Slide 45: Other
Other As of and for the quarter ended September 30, 2017, dollars in thousands, includes HCP's pro rata share of unconsolidated JVs LEASED PROPERTIES Facility Facility Property Occupancy EBITDARM EBITDAR CFC Type/Operator Count Investment Cash NOI Beds %(1) CFC(1) (1) Hospitals Acute care 4 $ 341,03
Slide 46: Other Same Property Portfolio: Hospitals
Other Same Property Portfolio As of and for the quarter ended September 30, 2017, dollars in thousands HOSPITALS 3Q16 4Q16 1Q17 2Q17 3Q17 Property count 14 14 14 14 14 Investment $ 530,775 $ 530,777 $ 530,910 $ 530,910 $ 530,910 Beds 2,134 2,134 2,134 2,134 2,134 Occupancy %(1) 53.8 50.7 51.2 52.1 5
Slide 47: Other Same Property Portfolio: Total Other
Other Same Property Portfolio As of and for the quarter ended September 30, 2017, dollars in thousands, includes HCP's pro rata share of unconsolidated JVs TOTAL OTHER(1) 3Q16 4Q16 1Q17 2Q17 3Q17 Property count 80 80 80 80 80 Investment $ 945,406 $ 927,448 $ 931,768 $ 946,244 $ 959,134 Total Rental
Slide 48: Unconsolidated Joint Ventures
Unconsolidated Joint Ventures As of and for the quarter ended September 30, 2017, dollars and square feet in thousands SHOP Life Medical SELECTED FINANCIAL DATA AT 100% Total CCRC Non-CCRC Science Office Other (1) Includes $17.1 million related to non- Joint ventures' Investment $ 2,739,216 $ 1,439,
Slide 49: 2017 Guidance
2017 Guidance Projected full year 2017, dollars in millions, except per share amounts Full Year Full Year 2017 Guidance 2017 Guidance (November 2, 2017) (August 1, 2017) Net income, FFO and FFO as Adjusted per Share Guidance Diluted earnings per common share(1) $1.16 - $1.20 $1.18 - $1.24 Diluted FF
Slide 50: 2017 Guidance Other Supplemental Information
2017 Guidance Other Supplemental Information Projected full year 2017, dollars in millions, except per share amounts and net dispositions Full Year Full Year 2017 Guidance 2017 Guidance (November 2, 2017) (August 1, 2017) Other Supplemental Information - Cash Addition (Reduction) Amortization of def
Slide 51: 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 the Company’s consolidated measure of liquidity and the Company’s ability to me
Slide 52: Glossary
Glossary Estimated / Actual Completion Date Funds Available for Distribution (“FAD”)* For Developments, management’s estimate of the period the core and shell structure improvements See the “Funds Available for Distribution” definition included in the accompanying Discussion and are expected to be o
Slide 53: Glossary
Glossary Net Operating Income from Continuing Operations (“NOI”) and Cash Retention Rate NOI* The ratio of total renewed square feet to the total square feet expiring and available for lease, See the “NOI” and “Cash NOI” definitions included in the accompanying Discussion and excluding the square fe
Slide 54: Glossary
Glossary Square Feet (Sq. Ft.) Total Market Equity The square footage for properties, excluding square footage for development or redevelopment The total number of outstanding shares of the Company’s common stock multiplied by the closing properties prior to completion. price per share of its common
Slide 55: Debt Ratios: Adjusted EBITDA and Adjusted Fixed Charge Coverage
Debt Ratios Adjusted EBITDA and Adjusted Fixed Charge Coverage Dollars in thousands Three Months Ended September 30, 2017 Net income (loss) $ (5,720) Interest expense 71,328 Income tax expense (benefit) (5,481) Depreciation and amortization 130,588 HCP’s share of unconsolidated JV: Interest expense
Slide 56: Debt Ratios: Total Debt and Net Debt
Debt Ratios As of and for the quarter ended September 30, 2017, dollars in thousands TOTAL DEBT AND NET DEBT September 30, 2017 Bank line of credit(1) $ 605,837 Term loan(2) 226,205 Senior unsecured notes 6,393,926 Mortgage debt 145,417 Other debt 94,818 Consolidated Debt $ 7,466,203 HCP's share of
Slide 57: Company Information
COMPANY Information BOARD OF DIRECTORS MICHAEL D. MCKEE CHRISTINE N. GARVEY Executive Chairman, HCP, Inc. Former Global Head of Corporate Real Estate Services, Deutsche Bank AG THOMAS M. HERZOG President and Chief Executive Officer, HCP, Inc. JAMES P. HOFFMANN Former Partner and Senior Vice Presiden
Slide 58: Forward-Looking Statements & Risk Factors
Forward-Looking Statements & Risk Factors “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The 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
Slide 59: Forward-Looking Statements & Risk Factors (continued)
Forward-Looking Statements & Risk Factors (continued) including the Affordable Care Act and licensure, certification and inspection requirements as well as laws addressing entitlement programs and related services, including Medicare and Medicaid, which may result in future reductions in reimburseme
Slide 60: 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 60