Healthpeak Properties(PEAK) - 2024 Q1 - Quarterly Results

Financial Performance - Net income for Q1 2024 was $6.5 million, or $0.01 per share, compared to $117.7 million, or $0.22 per share in Q1 2023[10] - Nareit FFO for Q1 2024 was $162.2 million, or $0.27 per share, down from $230.4 million, or $0.42 per share in Q1 2023[10] - AFFO for Q1 2024 was $247.8 million, or $0.41 per share, compared to $209.3 million, or $0.38 per share in Q1 2023[10] - Net income applicable to common shares for Q1 2024 was $6,477,000, a significant decrease from $117,698,000 in Q1 2023[29] - Nareit FFO applicable to common shares for Q1 2024 was $160,588,000, down from $228,101,000 in the same period last year, representing a decline of approximately 29.6%[29] - Diluted Nareit FFO per common share decreased to $0.27 in Q1 2024 from $0.42 in Q1 2023, reflecting a decline of 35.7%[29] - FFO as Adjusted applicable to common shares increased to $275,270,000 in Q1 2024 from $229,541,000 in Q1 2023, marking an increase of approximately 20%[29] - Diluted FFO as Adjusted applicable to common shares for Q1 2024 was $277,480,000, compared to $231,881,000 in Q1 2023, indicating an increase of approximately 19.7%[29] - Adjusted Funds From Operations (AFFO) applicable to common shares for Q1 2024 was $245,436,000, up from $207,659,000 in Q1 2023, representing a 18.1% increase[32] - Diluted AFFO per common share increased to $0.41 in Q1 2024 from $0.38 in Q1 2023, reflecting a 7.9% growth[32] Guidance and Projections - The company increased its full-year 2024 diluted earnings guidance to a range of $0.16 – $0.20 per share[9] - The company projects diluted earnings per common share for FY 2024 to be between $0.16 and $0.20, a significant increase from the previous guidance of $0.07 to $0.13[34] - The guidance for diluted Nareit FFO per common share for FY 2024 is set at $1.56 to $1.60, slightly up from the previous range of $1.54 to $1.60[34] - Total Year-Over-Year Merger-Combined Same-Store Cash (Adjusted) NOI Growth is projected to be between 2.50% and 4.00% for FY 2024, an increase from the prior estimate of 2.25% to 3.75%[34] Mergers and Acquisitions - Year one merger-related synergy forecast increased by $5 million to $45 million following the merger with Physicians Realty Trust[13] - The company anticipates synergies from the merger with Physicians Realty Trust, although specific financial impacts were not detailed[24] Capital Structure and Liquidity - Healthpeak repurchased $100 million of common stock at an average price of $17.11 per share, with $344 million remaining available for share repurchases[17] - The company entered into a new $750 million term loan with a fixed interest rate of 4.5% for five years[18] - Total assets increased to $20,542,040,000 as of March 31, 2024, compared to $15,698,850,000 on December 31, 2023, reflecting a growth of approximately 30.5%[26] - Total liabilities amounted to $10,942,541,000, up from $8,773,980,000, indicating a rise of approximately 24.8%[26] - Total liquidity as of March 31, 2024, is approximately $2.92 billion, including $101.76 million in cash and cash equivalents[42] - The company has a secured debt ratio of 2.3% as of March 31, 2024, indicating strong compliance with financial covenants[41] - The weighted average interest rate on the company's debt is 4.12%[45] Operational Highlights - The company completed property management internalization in 10 markets covering 17 million square feet[9] - The operating portfolio includes 748 properties with a total investment of $21,977,145,000 and real estate revenues of $592,709,000 for Q1 2024[35] - The company has a total of 703,733,446 shares issued and outstanding as of March 31, 2024, compared to 547,156,311 shares previously[26] - The company has a total of 588,100 square feet in development projects in process as of March 31, 2024[51] - The company plans to allocate $600 million to $700 million for development, redevelopment, and revenue-enhancing capital expenditures in FY 2024[34] Market and Tenant Information - The top market by square footage is San Francisco, CA, accounting for 23% of the combined ABR, followed by Boston, MA at 10%[56] - The largest tenant, HCA Healthcare, represents 8.0% of the annualized base rent (ABR), with the top 20 tenants contributing significantly to revenue stability[61] - The annualized base rent per square foot for renewals increased by 3.4% for outpatient medical and 2.6% for lab spaces[63] - The trailing twelve-month retention rate stands at 84.1% for outpatient medical and 77.8% for total[63] - Fixed lease escalators account for 95.2% of leased square feet, with a total escalator rate of 2.9%[64] Risks and Compliance - The company is facing risks related to macroeconomic trends, including inflation and interest rates, which could impact future financial performance[24] - The company has committed to maintaining compliance with environmental, social, and governance requirements, which may affect operational strategies moving forward[24] Development and Future Strategies - The estimated cost to complete development projects is $183 million, with projected stabilized portfolio cash (adjusted) NOI of $42 million[78] - The company is actively pursuing redevelopment projects to reposition properties, which are expected to enhance long-term value[113] - Future growth strategies include market expansion and potential acquisitions to enhance the company's portfolio and market presence[1] Miscellaneous - The company provides Non-GAAP financial measures, with reconciliations and definitions available on their investor relations website[124] - The supplemental report should be read alongside the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q for comprehensive financial information[125] - Market and industry data included in the report is based on surveys and publicly available information, though accuracy is not guaranteed[127] - The company maintains a dedicated investor relations contact for further inquiries[128]