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HEALTHPEAK PROPERTIES, INC. (DOC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered $0.06 diluted EPS, Nareit FFO of $0.45/share, FFO as Adjusted of $0.46/share, AFFO of $0.43/share, and 7.0% total same-store Cash (Adjusted) NOI growth; management reaffirmed full-year 2025 guidance ranges (FFO as Adjusted $1.81–$1.87/share; SS NOI +3–4%) .
  • Versus S&P Global consensus, DOC beat EPS and revenue, was roughly in-line on EBITDA, and FFO/share sat between Nareit FFO ($0.45) and FFO as Adjusted ($0.46) relative to consensus 0.458; guidance was maintained despite lab headwinds, aided by outpatient medical and CCRCs strength .
  • Capital allocation optionality: $94M of buybacks through Apr 24, 2025 (5.1M shares at $18.50), $500M 10-year notes at 5.375%, ~$2.8B liquidity, and Net Debt/Adj. EBITDAre 5.2x; Hines partnership announced for Cambridge Point residential component .
  • Call narrative emphasized outpatient resilience and CCRC momentum; lab segment faces near-term uncertainty (funding/regulatory), with management expecting deceleration as internalization and free-rent benefits normalize; still pursuing structured life science opportunities and buybacks within a $500M investment framework .

What Went Well and What Went Wrong

What Went Well

  • Outpatient medical: 5.0% SS Cash (Adjusted) NOI growth, 973k sf executed, 86% retention, +4% cash releasing spreads; CEO highlighted internalization as a “success strategically and financially” .
  • CCRCs: 15.9% SS Cash (Adjusted) NOI growth, ~86% occupancy with runway (3–4 pts upside); CFO: “rate growth of ~6% and 100 bps increase in occupancy” drove strength .
  • Liquidity and capital markets: $500M 10-year unsecured notes at tightest 10-year spread in company history, ~$2.8B liquidity, and share repurchases at ~10% FFO yield .

What Went Wrong

  • Lab deceleration ahead: Q1 SS growth of 7.7% benefited from free-rent expirations and internalization; management expects quarterly SS growth to slow as those benefits normalize .
  • Regulatory/funding uncertainty: management cited NIH/FDA/policy headlines and tougher capital raising for some tenants; watch list composition unchanged but monitoring credit closely .
  • Cost risk from tariffs: management estimated potential 2–6% cost increases for future developments (mitigated by GMP contracts and supplier work) .

Financial Results

Headline P&L

MetricQ1 2024Q4 2024Q1 2025
Total Revenues ($USD)$606,560,000 $697,988,000 $702,889,000
Diluted EPS ($)$0.01 $0.01 $0.06
Nareit FFO per Share ($)$0.27 $0.44 $0.45
FFO as Adjusted per Share ($)$0.45 $0.46 $0.46
AFFO per Share ($)$0.42 $0.40 $0.43
EBITDA ($USD)$248,642,000*$334,051,000*$401,044,000*
EBITDA Margin (%)40.99%*47.86%*57.06%*
Net Income Margin (%)1.10%*0.65%*6.09%*

Values with asterisks retrieved from S&P Global.

Segment Portfolio Cash Real Estate Revenues

SegmentQ1 2024Q4 2024Q1 2025
Outpatient Medical ($USD)$225,124,000 $301,759,000 $304,408,000
Lab ($USD)$207,332,000 $210,612,000 $205,836,000
CCRC ($USD)$138,777,000 $145,963,000 $148,927,000
Other ($USD)$21,477,000 $21,751,000 $22,452,000

KPIs and Same-Store NOI Growth (YoY, three-month)

KPIQ1 2025
Total SS Cash (Adjusted) NOI Growth (%)7.0%
Outpatient Medical SS Growth (%)5.0%
Lab SS Growth (%)7.7%
CCRC SS Growth (%)15.9%
OM leasing executed (sf)973,000; 86% retention; +4% cash releasing spreads
Lab leasing executed (sf)276,000; 88% retention; +5% cash releasing spreads; 175k sf executed post-Q1, 400k sf LOIs

Q1 2025 Results vs S&P Global Consensus

MetricConsensusActualSurprise
Primary EPS ($)0.0565*0.0633*+0.0068 (~+12%)*
Revenue ($USD)$685,713,450*$702,889,000 +$17,175,550 (~+2.5%)*
EBITDA ($USD)$401,365,910*$401,044,000*-$321,910 (~0%)*
FFO/Share (REIT) ($)0.45816*Nareit FFO: 0.45 ; FFO as Adj: 0.46 Mixed (near in-line)*

Values with asterisks retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Diluted EPS ($)FY 2025$0.30 – $0.36 $0.30 – $0.36 Maintained
Diluted Nareit FFO/share ($)FY 2025$1.81 – $1.87 $1.81 – $1.87 Maintained
Diluted FFO as Adjusted/share ($)FY 2025$1.81 – $1.87 $1.81 – $1.87 Maintained
Total Merger-Combined SS Cash (Adj) NOI Growth (%)FY 20253% – 4% 3% – 4% Maintained
Dividend (monthly)Q2 2025Indicated monthly ~$0.10167 from Apr’25 $0.10167/month (Apr–Jun); $0.305/quarter annualized $1.22 Implemented
Net Debt to Adjusted EBITDAre (actual)Q1 2025n/a5.2x n/a

Earnings Call Themes & Trends

TopicQ-2 (Q3 2024)Q-1 (Q4 2024)Current (Q1 2025)Trend
Outpatient medical internalization14 markets complete; synergies raised Plan to internalize +8M sf in 2025; ~$50M synergies run-rate in 2024 Continued success; strong leasing, retention and mark-to-market Improving/Executing
Lab market demand/supplyLarge leases at Portside/Vantage; pipeline and LOIs expanding 2.1M sf 2024 lab leasing; redevelopment ramp; expect 5–10% mark-to-market Near-term decel as free-rent/internalization normalize; strong LOIs; policy/funding uncertainty Mixed; near-term cautious
Structured investments & buybacksn/a$500M investment plan; 8% loans; potential $200–$300M OM developments Maintain $500M plan; include buybacks; reassessing life science pipeline returns Flexible allocation
Regulatory/policy (FDA/NIH/tariffs)n/aPositive stance on innovation/deregulation; NIH ~$50B funding Expect FDA efficiency improvements; pill penalty elimination aiding small molecules; tariffs cost +2–6% potential Watching policy tailwinds
CCRCs fundamentalsStrong YTD, entry fee strategy AFFO definition to include non-refundable entrance fee cash; strong growth 15.9% SS growth; ~86% occupancy; pricing power Strong

Management Commentary

  • CEO: “Maintaining guidance against this market backdrop is a testament to our diversified high quality portfolio. Strong results in outpatient medical and senior housing are offsetting weakness in our lab business…” .
  • CEO on lab: “No doubt it's a bumpy road… Washington’s willingness to address these risks… has the potential to be very positive for life science real estate demand… onshore biomanufacturing… eliminate the ‘pill penalty’…” .
  • CFO: “We reported FFO as adjusted of 46¢ per share, AFFO of 43¢ per share, and total portfolio same store growth of 7%… We are maintaining our FFO as adjusted guidance… and blended same store growth of 3% to 4%” .
  • CFO on Cambridge Point: “Selected Hines… to advance the residential component… commence once fully entitled late next year… validates this generational opportunity” .

Q&A Highlights

  • Lab trajectory: Deceleration expected due to normalization of internalization/free-rent; uncertain funding/regulatory timelines, but strong LOI pipeline; larger deals emerging across markets .
  • Capital deployment: Buybacks driven by stock attractiveness (~10% FFO yield); flexible $500M investments (loans/acquisitions/development) while keeping leverage mid‑5x .
  • Tenant credit/watch list: Composition “hasn't changed materially,” active monitoring; some tenants facing capital raising hurdles .
  • Tariffs/development costs: Potential 2–6% increase on future projects, largely mitigated by GMP contracts and supplier engagement .
  • Cambridge Point economics: Phase takedowns of land to Hines; residential capitalized by Hines; DOC retains upside and optionality on lab timing .

Estimates Context

  • Q1 2025 vs S&P Global: EPS and revenue beat; EBITDA essentially in-line; FFO/share mixed (Nareit FFO slightly below consensus; FFO as Adjusted slightly above). Near-term estimate revisions likely reflect revenue outperformance and maintained FY guidance, with lab SS NOI momentum expected to decelerate as transient benefits roll off .
    Values for estimates retrieved from S&P Global.

Key Takeaways for Investors

  • Diversified strength: Outpatient and CCRC momentum (+5.0% and +15.9% SS NOI, respectively) offset lab volatility; guidance reaffirmation supports stability .
  • Near-term lab caution, medium-term opportunity: Expect SS deceleration in 2025 as free-rent/internalization benefits fade; structural tailwinds (policy, new supply near zero) and strong campus scale support medium-term recovery .
  • Capital allocation optionality: Buybacks at attractive implied yields and structured life science investments with purchase options provide flexible return pathways while preserving target leverage in mid‑5x .
  • AFFO definition change increases transparency of CCRC cash generation; dividend cadence shifted to monthly (~$0.305/quarter annualized $1.22) supporting income thesis .
  • Watch list/credit risk monitored; no material change in composition; keep focus on funding environment and regulatory clarity as near-term stock narrative drivers .
  • For trading: EPS/revenue beat and guidance hold are supportive; stock likely sensitive to lab headlines and capital deployment updates; monitor execution on LOIs and redevelopment lease-ups.