Healthpeak Properties, Inc. · NYSE:DOC
Healthpeak Properties — HCP — Investor Presentation (September 2017)
34 slides from Healthpeak Properties's investor presentation, Sep 11, 2017
Slide 1: Investor Presentation September 2017
Investor Presentation September 2017
Slide 2: Table of Contents
HCP 2 Table of Contents Introduction to HCP Segment Overviews Development and Redevelopment Balance Sheet, Guidance and Sustainability Appendices 3-12 13-18 19-22 23-28 29-33 Data in presentation is as of June 30, 2017 unless otherwise noted.
Slide 3: Introduction to HCP
HCP 3 INTRODUCTION TO HCP
Slide 4: HCP at a Glance
HCP 4 Introduction HCP at a Glance HIGH-QUALITY PRIVATE PAY DIVERSIFIED 32 YEARS AS A PUBLIC COMPANY Member of S&P 500 4.9% Dividend Yield(2) 799 PROPERTIES 18 Million Sq. Ft. Medical Office 7 Million Sq. Ft. Life Science 46,000 Senior Housing Units 3RD LARGEST HEALTHCARE REIT $23 Billion in Enterpr
Slide 5: What Differentiates HCP
HCP 5 What Differentiates HCP Strong and improving investment grade balance sheet with ample liquidity and no signif 44% of Cash NOI and Interest Income(1) from a diversified senior housing portfolio: 25% triple-net with well-covered leases and 19% SHOP Premier Life Science portfolios in San Fra
Slide 6: Senior Leadership
HCP 6 Senior Leadership TOM HERZOG PRESIDENT AND CHIEF EXECUTIVE OFFICER Mr. Herzog is our President and CEO and a member of our Board of Directors. Mr. Herzog is responsible for all aspects of the Company’s business and has been instrumental in the recent repositioning of the Company through the sa
Slide 7: The Opportunity: Significant Pipeline for Future Growth
HCP 7 SH - NNN 25% SHOP 19% Life Science 23% Medical Office 23% Other 10% $23B Enterprise Value $1.1 Trillion Other public REITs HCP Other owners of healthcare real estate U.S. HEALTHCARE REAL ESTATE(1) The Opportunity HCP Has a Significant Pipeline for Future Growth HCP’s PORTFOLIO(2) (1) Sources:
Slide 8: HCP Portfolio & Strategy Overview
HCP 8 HCP Portfolio & Strategy Overview Focused Growth in Three Core Segments One of the largest MOB portfolios 18M sq. ft.; 83% on-campus 87% in Top-50 MSAs(1) Senior Housing Medical Office Parker Adventist Denver, CO The Solana Preserve Houston, TX Life Science MEDICAL OFFICE FOCUS Grow re
Slide 9: Execution of Strategic Repositioning
HCP 9 HC-ONE LOAN REPAYMENT TANDEM LOAN SALE ANNOUNCEMENT $500M BOND TENDER SALE OF 64 BROOKDALE ASSETS FOUR SEASONS LOAN SALE SALE OF INTEREST IN BROOKDALE PORTFOLIO Execution of Strategic Repositioning SPUN-OFF SNF ASSETS OCTOBER 2016 JANUARY 2017 MARCH 2017 SUMMER 2017 ELIMINATED DIRECT SNF EXPOS
Slide 10: Portfolio Summary
HCP 10 Portfolio Summary Post-Acute / Skilled Nursing 26% ~0%(2) Medical Office & Life Science 29% 46% Senior Housing 35% 44% Private Pay 80% 95% Brookdale Coverage 1.02x 1.2x(3) Top 3 Tenant Concentration 54% 38% Mezzanine Loan Investments(4) $719M $17M SNF 26% LS 15% MOB 14% Other 10% SH NNN 22% S
Slide 11: Execution of Strategic Repositioning: Remaining Steps
HCP 11 Execution of Strategic Repositioning …With Several Remaining Steps Reduce Brookdale exposure to less than 20% of portfolio through sales and/or transitions Continue to enhance senior housing asset and portfolio management capabilities Further reduce net-debt/EBITDA to 6x or below over t
Slide 12: SHOP Update
HCP 12 SHOP Update Collaboration with Brookdale to Improve Performance SPECIALIZED SALES RESOURCES “Floating” sales specialists, dedicated to HCP’s SHOP assets, to temporarily backfill community Sales Director roles until vacancies can be filled INCREASED PROPERTY-LEVEL SALES RESOURCES Adding additi
Slide 13: Segment Overviews
HCP 13 SEGMENT OVERVIEWS
Slide 14: Diversified Senior Housing Portfolio
HCP 14 362 Properties 87% NOI in NIC-99 Markets(1) 46,000 Units Diversified Senior Housing Portfolio Balanced Mix of Well-Covered Triple-Net & SHOP NNN 57% of Cash NOI SHOP 43% of Cash NOI (1) Percentage based on Cash NOI.
Slide 15: Irreplaceable Life Science Portfolio
HCP 15 Concentration in 2 of the Top 3 Cluster Markets Annualized Base Rent by Tenant Type Deep Industry Relationships 97% Average occupancy over the past 2 years 20+ Years as premier life science owner and developer with 1.8M sq. ft. of entitled land 87% Revenues from public or well-established pri
Slide 16: Life Science Portfolio Overview
HCP 16 4.7M sq. ft. San Francisco Submarkets South San Francisco Redwood City Mountain View Hayward 2.1M sq. ft. Mountain View Redwood City South San Francisco San Diego Submarkets Torrey Pines University Towne Center Sorrento Mesa Poway Torrey Pines Sorrento Mesa Life Science Portfolio Overview San
Slide 17: Industry-Leading On-Campus Medical Office Portfolio
HCP 17 Market Density (sq. ft.) 500K+ 100K – 250K 250K- 500K under 100K SF 90%+ Consistently Occupied 83% / 95% On-Campus / Affiliated ~80% Average retention rate last five years Industry-Leading On-Campus Medical Office Portfolio 238 properties encompassing 18 million sq. ft.
Slide 18: Hospital and International Portfolio
HCP 18 $531M investment dollars, 14 properties and 2,100 beds NNN leases with 1.5%-2.5% average annual rent escalators Key relationships: HCA, Hoag, HealthSouth Hospital International $155M debt(2) and $388M real estate investment dollars, 61 properties and 3,200 beds NNN leases with 1.5%-
Slide 19: Development and Redevelopment
HCP 19 DEVELOPMENT AND REDEVELOPMENT
Slide 20: Development Summary
HCP 20 Represents a driver of accretive NAV and earnings growth upon stabilization, supplementing internal growth $313M of remaining spend to be funded with retained cash flow and non-core asset sales Development Summary(1) 3% 81% 16% Phases I & II of The Cove development are combined 100% lea
Slide 21: Key Development Projects: The Cove and Sierra Point
HCP 21 Key Development Projects The Cove and Sierra Point Sierra Point The Cove SF Bay Sierra Point (S. San Francisco) Premier 23-acre waterfront development site with entitlements to develop approximately 600,000 sq. ft. over time in a flexible, highly-amenitized design Targeting a Phase I star
Slide 22: Redevelopment Opportunity and Land Bank
HCP 22 Redevelopment Opportunity and Land Bank 1.8 million sq. ft. of entitlements on parcels we own and control Entitled land is located in key West Coast life science markets of San Francisco and San Diego Creates a shadow development pipeline in-excess of $1 billion Our portfolio has sign
Slide 23: Balance Sheet, Guidance & Sustainability
HCP 23 BALANCE SHEET, GUIDANCE & SUSTAINABILITY
Slide 24: Debt Maturity Schedule
HCP 24 Debt Maturity Schedule(1) $34 $32 $690 $815 $751 $918 $806 $1,153 $1,371 $3 $404 $0 $400 $800 $1,200 $1,600 $2,000 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Thereafter Senior Unsecured Notes Secured Debt (incl/ pro rata JV) Unsecured Term Loan $7.0 billion of total debt 4.1% weigh
Slide 25: Improved Debt Spreads Post-Spin
HCP 25 100 150 200 250 300 350 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 HCP VTR HCN Improved Debt Spreads Post-Spin Since the QCP spin, HCP’s credit spreads have improved in absolute terms and relative to peers Repaid $3.7B of debt(1) Reduced Brookdale conce
Slide 26: 2017 Cash NOI Same Property Performance Guidance
HCP 26 5.5% 4.0% 3.0% 1.3% (1.5%) 3.0% SH NNN Life Science Medical Office Other SHOP Total HCP Senior Housing triple-net performance is primarily driven by contractual rent increases and Brookdale lease restructure Life Science performance driven by contractual rent escalators and leasing activi
Slide 27: 2017 Guidance
HCP 27 2017 Guidance YoY Cash NOI SPP Growth 2.5%-3.5% YoY NOI SPP Growth 1.2%-2.2% G&A Expense $83M-$87M Interest Expense $300M-$310M Net Dispositions(1) $2.1B-$2.6B @ 8.0% Recurring CapEx / 2nd Generation(2) $108M-$115M 1st Gen TIs/ICE and Revenue Enhancing(2) $112M-$127M Re/Development Spend(2) $
Slide 28: Commitment to Sustainability
HCP 28 Commitment to Sustainability Received 2017 ENERGY STAR Partner of the Year for the first time Named to the 2016 N. America Dow Jones Sustainability Index (DJSI) for 4th consecutive year and to the World DJSI for 2nd year in a row Named to the FTSE4Good Index for the 5th consecutive year Ranke
Slide 29: Appendices
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Slide 30: Healthcare Expenditures Expected to Grow
HCP 30 Healthcare Expenditures Expected to Grow $5.5 Trillion $3.2 Trillion 17% 18% 19% 20% 21% Projection Healthcare Expenditures as a Percentage of U.S. GDP CMS projects a $2.3 trillion increase in spending within the next 10 years – this would likely provide abundant opportunities for our three c
Slide 31: Approaching Senior Demographic Tsunami
HCP 31 Approaching Senior Demographic Tsunami First Wave of Baby Boomers Turn 75 in 2020 0% 2% 4% 6% 8% 10% 12% 1980 1990 2000 2010 2020E 2030E 2040E 2050E Last Decade This Decade From 2020-2030, the 75+ population is expect to grow by 11 million people, representing a 50% increase in this segment o
Slide 32: Healthcare Spending Increases with Age
HCP 32 Healthcare Spending Increases with Age Average Annual Healthcare Expenditures by Age Group $0 $5 $10 $15 $20 $25 $30 $35 0-18 19-44 45-64 65-84 85+ On average, annual healthcare spending by seniors age 65+ is over 4x the annual spending by the under 65 population Source: CMS - National Health
Slide 33: MOBs Benefit from Increased Outpatient Visits
HCP 33 MOBs Benefit from Increased Outpatient Visits Acute Services Move Away From Hospitals 207 198 180 383 572 693 1994 2004 2014 Inpatient Outpatient Inpatient Days and Outpatient Visits (in millions) Seniors make over 2x the number of annual physician visits compared to the under 65 population S
Slide 34: Disclaimer and Forward-Looking Statements
HCP 34 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 int