Healthpeak Properties has closed the final $149 million of its senior living community dispositions since August, bringing total sales proceeds to $4 billion since July 2020, CEO Thomas Herzog said during Wednesday’s third-quarter earnings call.
As Healthpeak completes its exit from the senior housing market except for continuing care retirement communities, the Denver-based real estate investment trust reported its remaining rental senior housing exposure consists solely of a 53.5% interest in a 19-property senior housing joint venture. According to the CEO, Healthpeak has funneled sales proceeds into its core life sciences and medical office building acquisitions and debt reduction.
“Our combined CCRC and sovereign wealth fund JV was roughly in line with expectations,” Herzog said.
President and Chief Investment Officer Scott Brinker called the REIT’s CCRC concentration in Florida “a long-term positive,” yet he said the third quarter was challenging as the delta variant of the coronavirus hit the state hard. This action had a temporary effect on occupancy, particularly in the assisted living and skilled nursing segments, he said.
“Consistent with the national headlines, labor is a headwind,” Brinker said. “As a result, same store cash [net operating income] growth is negative 1.7%.”
Independent living represents two-thirds of Healthpeak’s units across its CCRC campuses, and “demand for those units is strong,” he said.
Entry fee sales are almost back to 2019 levels, and cash receipts exceed historical levels, Brinker said.
“We have strong pricing power in most of our markets, supported by the housing market,” he said.
