Healthpeak Properties, Inc. · NYSE:DOC
Healthpeak Properties — HCP — Q1 2017 Earnings Presentation
48 slides from Healthpeak Properties's earnings presentation, May 2, 2017
Slide 1: Table of Contents
Overview 3 Portfolio Summary 4 Capitalization and Debt 6 Investment Summary - Fundings & Dispositions 9 Developments and Redevelopments 10 Capital Expenditures 12 Portfolio Diversification 13 Same Property Portfolio 15 Expirations and Maturities 16 Triple-net Master Lease Profile 17 Portfolio Senior
Slide 2: The Numbers: Overview
THE NUMBER S Overview(1) As of and for the quarter ended March 31, 2017, dollars, square feet and shares in thousands, except per share data Full Year 2017 Guidance (May 2, 2017) 1Q17 (1) Reconciliations, definitions and important discussions regarding the usefulness and limitations of the non-GAAP
Slide 3: Portfolio Summary
Portfolio Summary As of and for the quarter ended March 31, 2017, dollars in thousands CASH NOI AND INTEREST INCOME(1) Other 13% Senior housing triple-net 209 19 $ 3,856,908 $ 97,084 91.9 Senior housing triple-net 27% Life science 116 20 3,563,282 67,697 100.0 Other 76 31 922,617 27,623 79.7 $351.7M
Slide 4: Portfolio Summary: NOI, Cash NOI and Interest Income
Portfolio Summary For the quarter ended March 31, 2017, dollars in thousands NOI, CASH NOI AND INTEREST INCOME(1) Rental and Operating Revenue Operating Expenses Interest Income Cash NOI and Interest Income NOI(2) Cash NOI(2) Senior housing triple-net $ 100,034 $ (1,111) $ 98,923 $ 97,084 $ — $ 97,0
Slide 5: Capitalization
Capitalization Dollars and shares in thousands, except price per share data TOTAL CAPITALIZATION March 31, 2017 Shares Value Total Value Convertible partnership (DownREIT) units 6,645 31.28 207,856 Consolidated Debt N/A 8,141,452 HCP’s share of unconsolidated JV debt N/A 352,243 COMMON STOCK AND EQU
Slide 6: Indebtedness and Ratios: Debt Maturities
Indebtedness and Ratios As of March 31, 2017, dollars in thousands DEBT MATURITIES AND SCHEDULED PRINCIPAL REPAYMENTS (AMORTIZATION) Senior Unsecured Notes HCP’s Share of Unconsolidated JV Debt Mortgage Debt Total Debt 2018 492,421 — — — 3,641 — 496,062 28,053 3.73 524,115 1.75 2020 — — 800,000 2.79
Slide 7: Indebtedness and Ratios: Debt Structure
Indebtedness and Ratios As of March 31, 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 Floating rate 72,138 1 3.75% 2.3 Unsecured Fixed rate 7,474,956 90 4.26% 6.0 Combined $ 7,967,377
Slide 8: Fundings & Dispositions Investment Summary
Fundings & Dispositions Investment Summary For the quarter ended March 31, 2017, dollars and square feet in thousands INVESTMENT SUMMARY Three Months Ended March 31, 2017 Description Redevelopment fundings 5,100 Total $ 59,931 DISPOSITIONS(1) Trailing Yield(2) Property Count NOI Cash NOI Date Capaci
Slide 9: Developments
Developments As of March 31, 2017, dollars and square feet in thousands DEVELOPMENT PROJECTS IN PROCESS Placed in Service(1) Construction in Progress (“CIP”) Cost to Complete Total at Completion Name of Project MSA Segment Pearland II Houston, TX Medical office $ 5,400 $ 10,415 $ 2,985 $ 18,800 Cypr
Slide 10: Redevelopments and Land Held for Development
Redevelopments and Land Held for Development As of March 31, 2017, dollars and square feet in thousands REDEVELOPMENT PROJECTS IN PROCESS Placed in Service Costs to Complete Total at Completion Project Start Estimated Completion Name of Project MSA Segment CIP Medical City Dallas Garage Dallas, TX M
Slide 11: Capital Expenditures
Capital Expenditures First Quarter For the quarter ended March 31, 2017, dollars in thousands except per unit/square foot Senior Housing Triple-net SHOP Life Science Medical Office Other Total Recurring capital expenditures $ 1,306 $ 4,753 $ 1,096 $ 1,838 $ 132 $ 9,125 Lease commissions — — 1,629 3,
Slide 12: Portfolio Diversification: MSA
Portfolio Diversification MSA As of and for the quarter ended March 31, 2017, dollars in thousands, includes HCP’s pro rata share of unconsolidated JVs CASH NOI AND INTEREST INCOME BY MSA(1) Senior Housing Triple-net Life Science Medical Office % of Total MSA Properties SHOP Other Total Dallas, TX 4
Slide 13: Portfolio Diversification: Operator/Tenant
Portfolio Diversification Operator/Tenant As of and for the quarter ended March 31, 2017, dollars in thousands, includes HCP’s pro rata share of unconsolidated JVs CASH NOI AND INTEREST INCOME BY OPERATOR/TENANT(1) Tenant/Credit Exposure SHOP/Operator Exposure % of Total Cash NOI and Interest Income
Slide 14: Same Property Portfolio
Same Property Portfolio As of March 31, 2017, dollars in thousands, includes HCP’s pro rata share of unconsolidated JVs THREE-MONTH SPP SHOP 123 2,941,501 84 88.1% 89.4% 2.9% 2.9% 88.1% 88.7% 3.2% 3.2% Medical office 217 3,327,277 86 92.3% 92.0% 3.2% 4.4% 92.3% 92.3% (0.3%) 0.4% Total Portfolio 740
Slide 15: Expirations and Maturities
Expirations and Maturities(1) As of March 31, 2017, dollars in thousands, includes HCP’s pro rata share of unconsolidated JVs EXCLUDES PURCHASE AND PREPAYMENT OPTIONS Annualized Base Rent Senior Housing Triple-net Life Science Medical Office Interest Income Year Total % of Total Other 2018 177,880 1
Slide 16: Triple-Net Master Lease Profile
Triple-Net Master Lease Profile(1) INVESTMENT TYPE Senior Housing Other No Corporate Guaranty Share of HCP Cash NOI and Interest Income % 0.3% 1.2% 1.9% 0.1% 1.0% 0.9% 0.3% 1.2% 0.6% 0.4% 1.2% 0.6% 0.2% 2158 0 2 4 6 8 10 12 14 16 TERM (YEARS TO EXPIRATION) % of HCP Cash NOI and Interest Income Weigh
Slide 17: Senior Housing Triple-net
Senior Housing Triple-net As of and for the quarter ended March 31, 2017, dollars in thousands, except REVPOR Property Count Cash NOI Occupancy % EBITDARM CFC EBITDAR CFC Property Portfolio Investment Units REVPOR Assisted living 147 $ 2,218,020 $ 59,427 11,526 86.4 $ 5,402 1.33x 1.13x CCRC 9 455,42
Slide 18: Senior Housing Triple-net Same Property Portfolio
Senior Housing Triple-net Same Property Portfolio Dollars in thousands, except REVPOR 1Q16 2Q16 3Q16 4Q16 1Q17 Investment $ 3,747,952 $ 3,753,920 $ 3,763,519 $ 3,772,237 $ 3,779,346 Occupancy % 87.0 86.6 86.7 86.8 86.5 EBITDARM CFC 1.35x 1.34x 1.34x 1.33x 1.32x NOI: Operating expenses (174) (169) (1
Slide 19: Senior Housing Triple-net New Supply - Assisted Living
Senior Housing Triple-net New Supply - Assisted Living As of and for the quarter ended March 31, 2017, dollars in thousands NEW SUPPLY ANALYSIS HCP Portfolio 5-Mile Radius(1) % of Triple-net Cash NOI Cash NOI Exposed to New Supply(2)(4) 5-Year 80+ Population Growth % 2016-2021 Properties/ Units Unde
Slide 20: Senior Housing Triple-net New Supply - Independent Living & CCRC
Senior Housing Triple-net New Supply - Independent Living & CCRC As of and for the quarter ended March 31, 2017, dollars in thousands NEW SUPPLY ANALYSIS HCP Portfolio 5-Mile Radius(1) % of Triple-net Cash NOI Cash NOI Exposed to New Supply(2)(4) Properties/ Units Under Construction(3) 5-Year 75+ Po
Slide 21: SHOP
SHOP As of and for the quarter ended March 31, 2017, dollars in thousands, except REVPOR Property Count Cash NOI Occupancy % Investment Units REVPOR AL 48 $ 925,659 $ 18,823 4,858 86.2 $ 4,486 CCRC 1 25,992 1,231 244 91.5 7,323 HCP’s Share of Unconsolidated JVs IL 6 72,933 866 724 97.0 3,247 72 $ 1,
Slide 22: SHOP by MSA
SHOP MSA As of and for the quarter ended March 31, 2017, dollars in thousands, except REVPOR, includes HCP’s pro rata share of unconsolidated JVs OPERATING PORTFOLIO METRICS Units(1) REVPOR(1) % of Cash NOI MSA Investment Cash NOI AL IL CCRC Occupancy % AL IL CCRC Houston, TX 376,988 6,665 10.1 87 1
Slide 23: SHOP Trend
SHOP Trend Dollars in thousands, except REVPOR, includes HCP’s pro rata share of unconsolidated JVs TOTAL OPERATING PORTFOLIO 1Q16 2Q16 3Q16 4Q16 1Q17 Investment $ 3,542,464 $ 3,539,673 $ 3,831,503 $ 3,986,662 $ 3,481,155 Occupancy %(1) 88.1 87.5 88.2 87.8 87.6 NOI: Operating expenses (156,091) (157
Slide 24: SHOP Same Property Portfolio
SHOP Same Property Portfolio(1)(2) Dollars in thousands, except REVPOR, includes HCP’s pro rata share of unconsolidated JVs SAME PROPERTY PORTFOLIO TREND 1Q16 2Q16 3Q16 4Q16 1Q17 Investment $ 2,874,890 $ 2,892,100 $ 2,912,330 $ 2,930,309 $ 2,941,501 Occupancy % 89.4 88.7 88.9 88.7 88.1 NOI and Cash
Slide 25: SHOP New Supply - Assisted Living
SHOP New Supply - Assisted Living As of and for the quarter ended March 31, 2017, dollars in thousands, includes HCP’s pro rata share of unconsolidated JVs NEW SUPPLY ANALYSIS HCP Portfolio 5-Mile Radius(1) % of SHOP Cash NOI Cash NOI Exposed to New Supply(3) 5-Year 80+ Population Growth % 2016-2021
Slide 26: SHOP New Supply - Independent Living & CCRC
SHOP New Supply - Independent Living & CCRC As of and for the quarter ended March 31, 2017, dollars in thousands, includes HCP’s pro rata share of unconsolidated JVs NEW SUPPLY ANALYSIS HCP Portfolio 5-Mile Radius(1) % of SHOP Cash NOI Cash NOI Exposed to New Supply(3) 5-Year 75+ Population Growth %
Slide 27: Life Science
Life Science As of and for the quarter ended March 31, 2017, dollars and square feet in thousands, includes HCP’s pro rata share of unconsolidated JVs INVESTMENTS Property Count Cash NOI Square Feet Occupancy % MSA Investment San Francisco/San Jose, CA 81 2,665,148 $ 50,981 4,505 97.6 $ Remaining 8
Slide 28: Life Science: Lease Expirations and Tenant Concentration
Life Science As of March 31, 2017, dollars and square feet in thousands, includes HCP’s pro rata share of unconsolidated JVs SELECTED LEASE EXPIRATION DATA (NEXT 5 YEARS) Total San Francisco/San Jose San Diego Remaining 2018 1,264 18 63,811 22 1,166 61,493 62 1,756 36 562 2020 655 9 21,111 7 305 10,
Slide 29: Life Science: Leasing Activity
Life Science Square feet in thousands, includes unconsolidated JVs LEASING ACTIVITY Leased Square Feet Annualized Base Rent per Sq. Ft. % Change In Cash Rents(1) HCP Tenant Improvements per Sq. Ft. Leasing Costs per Sq. Ft. Average Lease Term (Months) Retention Rate YTD Expirations (81) 34.94 New le
Slide 30: Medical Office
Medical Office As of and for the quarter ended March 31, 2017, dollars and square feet in thousands, includes HCP’s pro rata share of unconsolidated JVs PORTFOLIO BY MARKET Square Feet On-campus(1) Off-campus(2) Total Cash Occupancy Dallas, TX 474,923 8,593 90.5 1,840 34 278 — 2,118 34 12 Philadelph
Slide 31: Medical Office: Health Systems and Leasing Activity
Medical Office As of and for the quarter ended March 31, 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 Rank(1) % of Annualized Base Rent Credit Rating Adjacent / Anchored(2)
Slide 32: Medical Office: Lease Expirations and Same Property
Medical Office As of and for the quarter ended March 31, 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 2018 2,335 14 54,854 14 1,927 45,454 408 9,400 2020 2,170 13 52,479 14 1,9
Slide 33: Other
Other As of and for the quarter ended March 31, 2017, dollars in thousands, includes HCP’s pro rata share of unconsolidated JVs LEASED PROPERTIES Occupancy %(1) Property Count Cash NOI EBITDARM CFC(1) EBITDAR CFC(1) Type/Operator Investment Beds Acute care 4 $ 341,034 $ 14,531 1,438 47.9 8.48x 7.97x
Slide 34: Other Same Property Portfolio
Other Same Property Portfolio As of and for the quarter ended March 31, 2017, dollars in thousands HOSPITALS 1Q16 2Q16 3Q16 4Q16 1Q17 Investment $ 530,817 $ 530,817 $ 530,775 $ 530,775 $ 530,910 Occupancy %(1) 52.0 56.3 53.8 50.7 51.2 EBITDAR CFC(1) 6.36x 6.50x 6.48x 6.30x 6.24x Total revenues $ 20,
Slide 35: Other Same Property Portfolio: Total
Other Same Property Portfolio As of and for the quarter ended March 31, 2017, dollars in thousands, includes HCP’s pro rata share of unconsolidated JVs TOTAL OTHER(1) 1Q16 2Q16 3Q16 4Q16 1Q17 Investment $ 961,928 $ 939,149 $ 927,498 $ 909,540 $ 913,859 Total revenues $ 29,423 $ 28,634 $ 28,712 $ 28,
Slide 36: Unconsolidated Joint Ventures
Unconsolidated Joint Ventures As of and for the quarter ended March 31, 2017, dollars and square feet in thousands SHOP Life Science Medical Office Total CCRC Non-CCRC(1) Other (1) Includes the RIDEA II portfolio following the sale of a 40% interest on January 18, 2017. (2) Excludes $451 million rel
Slide 37: 2017 Guidance
2017 Guidance Projected full year 2017, dollars in millions, except per share amounts and net dispositions Full Year 2017 Guidance (May 2, 2017) Full Year 2017 Prior Guidance (February 13, 2017) Net Income, FFO and FFO as Adjusted per Share Guidance Diluted FFO per common share $1.99 - $2.05 $1.88 -
Slide 38: Glossary
REP OR TING Glossary Adjusted Fixed Charge Coverage* Adjusted EBITDA divided by Fixed Charges. Adjusted Fixed Charge Coverage is a supplemental measure of liquidity and the Company’s ability to meet its interest payments on outstanding debt and pay dividends to its preferred stockholders, if applica
Slide 39: Glossary
REP OR TING Glossary Estimated / Actual Completion Date For Developments, management’s estimate of the period the core and shell structure improvements are expected to be or have been completed. For Redevelopments, management’s estimate of the period in which major construction activity in relation
Slide 40: Glossary
REP OR TING Glossary Net Debt to Adjusted EBITDA* Net Debt divided by Adjusted EBITDA is a supplemental measure of the Company’s ability to decrease its debt. Because the Company may not be able to use its cash to reduce its debt on a dollar-for-dollar basis, this measure may have material limitatio
Slide 41: Glossary
REP OR TING Glossary Square Feet (Sq. Ft.) The square footage for properties, excluding square footage for development or redevelopment properties prior to completion. Stabilized / Stabilization Newly acquired operating assets are generally considered Stabilized at the earlier of lease-up (typically
Slide 42: Adjusted EBITDA and Adjusted Fixed Charge Coverage
Adjusted EBITDA and Adjusted Fixed Charge Coverage Debt Ratios Dollars in thousands NET INCOME TO ADJUSTED EBITDA Three Months ended March 31, 2017 Interest expense 86,718 Depreciation and amortization of real estate and in-place lease intangibles 136,554 HCP’s share of unconsolidated JV EBITDA 19,6
Slide 43: Debt Ratios
Debt Ratios As of and for the quarter ended March 31, 2017, dollars in thousands March 31, 2017 TOTAL DEBT AND NET DEBT Term loan(2) 274,103 Mortgage debt 147,329 Consolidated Debt $ 8,141,452 HCP’s share of unconsolidated JV other debt 185,298 Cash and cash equivalents (764,114) Net Debt $ 7,692,93
Slide 44: Company Information
COMPANY Information BOARD OF DIRECTORS MICHAEL D. MCKEE Executive Chairman, HCP, Inc. CHRISTINE N. GARVEY Former Global Head of Corporate Real Estate Services, Deutsche Bank AG THOMAS M. HERZOG Chief Executive Officer, HCP, Inc. JAMES P. HOFFMANN Former Partner and Senior Vice President, Wellington
Slide 45: Forward-Looking Statements & Risk Factors
The Cove South San Francisco, CA 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 Sect
Slide 46: Forward-Looking Statements & Risk Factors (Continued)
Solana Preserve Houston, TX Forward-Looking Statements & Risk Factors (Continued) legislation, executive orders and other legal requirements, including the Affordable Care Act and licensure, certification and inspection requirements as well as laws addressing entitlement programs and related service
Slide 47: Corporate Headquarters and Offices
CORP ORATE HEADQUARTERS 192 0 MAIN STREE T, S UITE 1 2 00 IRVINE , CA 92614 (949) 4 07-0700 SAN FRANCIS CO OFFICE 95 0 TOWER LANE , S UITE 1 65 0 FOSTER CIT Y, CA 94 4 04 NASHVILLE OFFICE 3000 MERIDIAN B OULEVARD, S UITE 2 00 FRANKLIN , TN 37067 48
Slide 48: 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 ITY, CA 94404 FRANKLIN, TN 37067 (949) 407-0700