Healthpeak Properties is prioritizing its capital allocation on its life science and medical offices businesses and will be “opportunistic” regarding its continuing care retirement community portfolio, President and CEO Scott Brinker said Wednesday during the Denver-based real estate investment trust’s third-quarter earnings call.
The CCRC portfolio has good supply-and-demand fundamentals, he said, especially among its Florida properties.
“We like that business. [CCRCs are] performing pretty well,” Brinker said. “We have good real estate. We have a really good operating partner, and we’ve got a good internal team to manage it, so we’re happy to hold it.
“At the same time,” he added, “we realize it’s not a perfect fit for Healthpeak. So if at any point there was an opportunity that made sense for our shareholders, then our view is, we’d have to be open-minded about that.”
In 2019, Healthpeak Properties — known as HCP Inc. at the time — acquired Brookdale Senior Living’s 51% interest in 12 entry-fee CCRCs.
“That trade gave us full strategic control of the portfolio and a strong operating partner in [Life Care Services],” Brinker said. LCS operates 13 of the 15 CCRCs in Healthpeak’s portfolio.
‘Strongest quarter since COVID’
Same-store growth for CCRCs in the third quarter increased 4.1%, Chief Financial Officer Peter Scott said, adding that the results were driven by a 110-basis-point increase in occupancy in independent living, assisted living and memory care within the properties.
“This is the strongest quarter of occupancy gains in our [independent living, assisted living and memory care] units since COVID,” he said.
CCRC cash and receipts for the third quarter were $24 million, “once again outpacing our quarterly NREF amortization of $20 million,” the CFO said.
Healthpeak anticipates temporarily lower occupancy and sales at the CCRCs that were affected by Hurricane Ian in September, Scott said The REIT, he added, factored the hurricane’s aftermath into revised guidance for the segment by reducing the midpoint of CCRC same-store guidance by 200 basis points.
See more coverage of the earnings call in McKnight’s Senior Living.
