Thomas Herzog
Thomas Herzog

Healthpeak Properties continued its exit from most senior living with the sale of $1 billion in assets in the first quarter, with an additional $400 million in deals under hard or soft contract.

This news brings the Denver-based real estate investment trust closer to divesting its senior housing operating portfolio and triple-net lease senior housing assets.

CEO Thomas Herzog said Wednesday during a first quarter 2021 earnings call that Healthpeak continues to execute on all aspects of its plan, focusing on its three core business sectors: continuing care retirement communities, life sciences and medical office buildings.

“We had a strong start to the year and continue to execute on all aspects of the plan,” Herzog said.

The $1 billion in senior housing sales included 31 senior housing operating portfolio assets, including the $564 million sale of a 12-property portfolio operated by Oakmont Senior Living and the $334 million sale of a 10-property portfolio operated by Discovery Senior Living. It also included the sale of two triple-net lease properties operated by Next Step Senior Care and nine senior housing operating portfolio properties operated by Sonata, Milestone, Sunrise Senior Living, Capital Senior Living and Brookdale Senior Living, for proceeds totaling $121 million. 

CCRC portfolio

President and Chief Investment Officer Scott Brinker said that the REIT experienced an inflection point in its CCRC portfolio sooner than expected. Occupancy increased 10 basis points (0.1%) December to March, with an additional increase of 40 basis points (0.4%) in April. Occupancy as of March 31 was 80.6% for the assisted living, independent living and memory care communities, and it was 69.5% for skilled nursing facilities.

Trends are encouraging as leads exceed 2019 levels, Brinker said, and tours increased by almost 70%, driven in part by the REIT’s digital marketing initiative. Entry fee sales are up 80% from a low point in the second quarter of 2020, he said.

“Effective vaccine rollout and a strong housing market support continuous improvement,” Brinker said.

Executive Vice President and Chief Financial Officer Peter Scott added that favorable recent occupancy trends, moderated expenses and an uptick in entrance fees are leading to improved performance among the CCRCs, with 100% of the properties open to new admissions.