headshot - Healthpeak Properties President and Chief Investment Officer Scott Brinker
Healthpeak Properties President CEO Scott Brinker

Denver-based Healthpeak Properties saw same-store net operating income growth of 27% in its portfolio of continuing care retirement communities in the first quarter, Chief Financial Officer Peter A. Scott said Friday on the  real estate investment trust’s first-quarter earnings call.

The growth was driven by increased occupancy and rate growth, he said. 

“Occupancy in our CCRC portfolio ended the quarter at 85.2%, and we expect continued positive performance,” Scott said.

Healthpeak Properties’ portfolio includes 15 continuing care retirement communities across Washington, DC (1) and five states: Alabama (1), Florida (9), Michigan (1), Pennsylvania (2) and Texas (1). Life Care Services operates 13 of the CCRCs, and Sunrise Senior Living operates two of them. CCRCs/senior housing represents eight percent of the combined REIT’s tenant base, according to a presentation posted on the Healthpeak website. The portfolio also includes life sciences properties and medical office buildings.

The REIT has increased its 2024 earnings guidance after completing its merger with Physicians Realty Trust on March 1, the company said Friday. 2024 diluted earnings guidance was increased to a range of $0.16 to $0.20 per share, and the midpoint of 2024 funds from operations as adjusted and AFFO guidance was increased by +$0.02 per share, respectively, and total merger-combined same-store cash (adjusted) NOI growth guidance was increased by 25 basis points at the midpoint.

“We increased our 2024 earnings guidance by two pennies at the midpoint, driven by same-store results, outperformance on merger synergies and increased stock buybacks,” CEO Scott Brinker said. “The merger has proven to be a meaningful, positive catalyst for the company.”

The all-stock deal was valued at approximately $21 billion.

At the time of the merger, Healthpeak anticipated synergies of $40 million during 2024 with potential for $20 million or more of additional synergies by year-end 2025. A revised forecast, however, anticipates year one merger-related synergies of $45 million.

Same-store cash adjusted NOI growth from the merger in the continuing care retirement communities space for the first quarter of the year, according to a press release issued in conjunction with the earnings call.