Healthpeak Properties Reports Decrease in Net Income and Increased FFO for Fiscal Year 2024

Healthpeak Properties, Inc. reported a decrease in net income applicable to common shares to $242.4 million for the fiscal year ended December 31, 2024, compared to $304.3 million in 2023. This decrease was primarily due to increased depreciation, transaction and merger-related costs, and interest expense, partially offset by increased Adjusted NOI from the lab and outpatient medical segments and gains on real estate sales. Nareit FFO, a non-GAAP measure, increased to $1,092.7 million in 2024 from $985.2 million in 2023, while Adjusted FFO increased to $1,231.9 million from $978.3 million, and AFFO rose to $1,140.7 million from $884.2 million.

The company completed its merger with Physicians Realty Trust on March 1, 2024, acquiring 299 outpatient medical buildings. Significant real estate transactions during 2024 included the sale of a portfolio of 61 outpatient medical buildings for $697 million, 14 outpatient medical buildings for $220 million, and a portfolio of seven lab buildings for $180 million, resulting in a net gain on sales of $179 million. Development and redevelopment activities resulted in several projects being placed in service, including lab and outpatient medical buildings. Financing activities included a $750 million five-year unsecured term loan and the repurchase of 10.5 million shares of common stock under the 2022 Share Repurchase Program for $188 million.

Operational highlights included a 92% average occupancy rate for outpatient medical buildings and a 96% average occupancy rate for lab properties. Average annual rent per square foot for outpatient medical buildings increased to $36 from $35, while the average annual rent per square foot for lab properties increased to $87 from $82. The company also reported an 85% average occupancy rate for its continuing care retirement communities (CCRCs), with average annual rent per occupied unit increasing to $94,103 from $88,524. As of December 31, 2024, Healthpeak had 387 full-time employees.

The company's 10-K filing detailed numerous risk factors, including macroeconomic trends impacting costs, changes in the life science industry, tenant insolvency, illiquidity of real estate investments, and competition. Other risks included property development challenges, reliance on hospital systems, operational risks associated with third-party managed senior housing, uninsured losses, and the impact of environmental regulations and climate change. The filing also discussed risks related to the company's capital structure, market conditions, regulatory environment, and tax implications of its REIT status.

Healthpeak's outlook is tied to its ability to successfully integrate the acquired Physicians Realty Trust assets, manage its debt levels, and navigate the various market and regulatory risks outlined in the filing. The company's forward-looking statements emphasize its ongoing efforts to maximize risk-adjusted returns and support dividend growth, while acknowledging the uncertainties inherent in the real estate and healthcare sectors. The company declared a quarterly common stock cash dividend of $0.305 per share in February 2025.