Healthpeak Properties (DOC) 28 Jul 232023 Q2 Earnings call transcript

Company Profile

Participants

Andrew Johns	SVP, IR
Scott M. Brinker	President and CEO
Peter A. Scott	CFO
Scott R. Bohn	Chief Development Officer and Co-Head of Life Science
Thomas M. Klaritch	COO
Juan Sanabria	BMO Capital Markets
Vikram Malhotra	Mizuho
Austin Wurschmidt	KeyBanc Capital Markets
Nicholas Yulico	Scotiabank
Connor Siversky	Wells Fargo Securities
Joshua Dennerlein	Bank of America
Michael Griffin	Citigroup
Ronald Kamdem	Morgan Stanley
Steven Valiquette	Barclays Bank
Michael Mueller	J.P. Morgan Chase
John Pawlowski	Green Street Advisors
Wes Golladay	Robert W. Baird
James Kammert	Evercore ISI

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Healthpeak Properties, Incorporated Second Quarter Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. After today’s presentation there will be an opportunity to ask questions. [Operator Instructions]. is event this note being recorded. Please now Andrew Johns, would like Investor to to over conference the Senior turn Relations. I Vice of President Please ahead. go

Andrew Johns

call. contain Healthpeak's conference to second XXXX results Welcome quarter call forward-looking certain conference will statements. financial Today's

our in cause Although forward-looking and detailed based expectations. differ with actual forward-looking are to healthpeak.com. a results Executive statements website our of accordance and risks release from discussed any turn the this in G subject and on in have we exhibit will our SEC. factors we Reg to In measures the risk measures with assumptions, reconciled over expectations to all be our President financial duty reasonable uncertainties any non-GAAP The non-GAAP are exhibit the statements the forward-looking available believe GAAP reflected undertake on I on measures will SEC comparable included our A Scott also that materially statements. the is in Brinker. We Certain discussion our most is financial risks and update not with filings press directly yesterday, at do to X-K call. furnished requirements. call to an Officer, of Chief may the

Scott M. Brinker

Healthpeak’s Good to Andrew. Thanks, morning call. and second earnings quarter welcome

macro-environment strong can the We're reported X% operating here for we Our in where same XXXX Joining volatile blended be remains expected XXXX for is is control. evening, guidance. and Q&A. for CFO balance G&A our guidance shape. X.X% and team a a things me The prepared senior Last below handle have and we today increased remarks is our automation Through streamlining on Pete store to our Scott, great sheet in we growth. original earnings

real discovery delivery. playing important, technology the of our the medical which only health, is benefit is for Fundamental and we field of across growing. estate for our Equally desire improved demand from driver of impact

Progressive to every that example, epicenter, outpatient a possible outpatient The Health locations for The leading to For XX party shift systems. to the real much in outpatient but grow hospital as to And the capital cost have growth ratio plus. strategy Healthpeak with plus technology. with our hospital, health by aligns needs margins footprint. because plan the one made is XX Systems of of now the tighter estate like capture strategic remains seek of increasingly systems health with third knowledgeable profit delivery expand their of will labor,

delivery. the will on Today, last This understanding arises, accelerating we've expand problem and a just healthcare total improved spending shift before the space. that and care where healthcare Similarly, of issues The increase sector. technology development will technology we lab the and highly AI reinforce chemistry needed more are data capital will which years, of run addition will in the for said research regulated seek drive therapeutics seen from the machine testing, five algorithms genetics drug XX including care the will for detect a probability pie. problem after we learning of Laureate timelines. will it's comes and for arises. of she'd the need The alone. allocation discoveries and success our validations the and into proactive reduce expand the recently building science the is This Nobel drive the years A transform lab in itself, her never and which experienced environments. reactive, controlled seek and and in laboratory,

lab Our will outpatient medical of and be a critical future. buildings part this

recent the with health portfolio square leading we of More ago sign level their where now number a of model a footage saw is active choice. of buildings towards and directly future and relationships and become I on in partner from with comments starting outpatient for care, and current as few leasing. our lobbies, have toured XX our lots leased deep is a XX than portfolio a great and has to years performance irreplaceable months A systems. business shifted medical health we've outpatient very an system, half parking which

Vegas, concentration Our like next Dallas, Houston, markets plus. growth high in our Nashville the decade portfolio Phoenix, will benefit and for

should we our Moving tenant relationships. to and share where doing strong base, markets, what in this key have market which cash. a environment, is lab to business they have diversified been do significant in Biotech’s conserve sub

few in market perfect XX% answer outlook So a each benign discussions, prospect, solid made In but with which default Despite the to space. for activity, exchange who run reflect Fed the broader and leasing will of we or is leasing year-to-date may backdrop, been a uptick rates. because More past interest quarters naturally tenants disadvantage an case, longer-term for the more it the larger, has existing seeing had primarily for that big do existing either up sense cycles. make That accounted leasing. mindset the portfolio an tear recently, we've with existing can seen in lease in the isn't we've commitment.

core credit this I additional Despite core which to attractive good delever. having Subject remains it with back a the balance $XXX an results, to and sales. million and closing, down $XXX flexibility of and financing pay year-to-date, to turn less that fully rate close discussions backdrop, inactivity in cap market stabilized slow buy I'll proceeds currently X.X% use to markets guaranteed financial either line REITs, estate and of at have funds cover asset sheet, Pete We're from accretively we'll will given real to on but which The guidance. redemption have the of isn't stock. million environment, couple we've of or many our non-traded less core transactions. queues. sold accretively

Peter A. Scott

Scott. Thanks,

For we adjusted AFFO share, X.X%. per same the second of was $X.XX FFO’s per portfolio quarter, and $X.XX growth share, of of reported total store

share, equates per of a In to $X.XX an of XX%. ratio dividend payout which addition, our AFFO Board approximately declared

our markets. CCRCs, with see additional on Total with our upside $XX for quarter the Starting X color points growth Occupancy a the little we the and zero has a basis same performance. XXX per strong segment expect was very increased quarter receipts amortization year-over-year provide we XX.X%. store me share. supply Let in and new pennies cash receipts to for by million were cash exceed full NREF year in NREF more

store high outpatient space solid strong. to medical, Turning momentum Demand for we remains and had quarter same with our another of growth is X.X%. leasing

of reflection our was year was which assets our is were tested at scores. sector We XX-month quality documentation. budget a and again consistently Trailing our additional have of XX% the produces XX% our which have leading end of retention the high range. X% spreads leasing to XX% quarter, executed X% historical and X.X% the during Re-leasing in an full up time satisfaction which of tenant customer platform,

XX% have positive Finishing Year-to-date feet existing re-leasing approximately with lab. Same XXX,XXX of renewals. was quarter growth XX% leases, we executed on that activity store square we with has X.X%. for spreads been leasing of of the achieved and tenants,

addition, square July. feet executed have LOI we another in that In with of XXX,XXX of the activity majority occurring

of like incumbent respective superior LOIs demonstrates their the which have owners Healthpeak further All existing tenants, markets. are in property advantage that our with

of growing activity. billion Venture capital rounds start to deals showing of with A becoming data Series with IPO market year-to-date. announced more of life reverse popular. The signs more M&A public. alternative mergers $XX popular, providing go companies continues and $X an an tenant Biotech since companies increase is the markets billion are increased sequentially the raising we with are With investment over in Equity up readouts. second for are the capital XX% index quarter, open seeing positive for

tenant our An to important part profile. of strategy is lab our improve credit asset proactive management

As we announced, we downsized $X company. had a trading Revolution for cap Adverum in Medicines small favor credit cap a market billion previously of

the space assignment Therapeutics. to the In at Biotech. a we to facilitated Lonza quarter significant cases portion of the cove, During we Therapeutics Bioscience significant both Bicycle Kodiak credit Harpoon proactively the private the an upgrade. of second backfilled a lease And and

A earnings so quick paid regardless security leases, outcome. the July operating Sorrento been hold million, Therapeutics. note letters the of on four we $X.X through credit no in of impact deposits of and on or on XXXX rent full We've

no seen, clarity in completed. We a near-term. you've on financing have it the As will but assurances Sorrento point, on or this probably an I forward provide there exit to hope be details was package, path are working at can

May, Turning million our issued a In million $XXX approximately to yield of issuance balance year-to-date bringing now X.XX%. sheet. $XXX at of we bonds X.XX% to fixed blended rate

quarter Our at net floating $XXX rate debt balance end. was approximately million

Our environment. balance advantage sheet in competitive a continues to this be

of Our with $X liquidity. is X.X nearly billion to net debt EBITDA times

of have net exposure floating rate approximately X%. debt We

We have no maturing until XXXX. bonds

$XXX stable we and earnings Moody's. both of from We approximately have S&P annual ratings retained and million have

retained from earnings without Our need the development asset combination EBITDA. higher spend capacity for self-funded a debt from and of sales equity is or

would sales be asset Scott not any in and As guidance. contemplated potential mentioned, opportunistic are

$X.XX adjusted are and to increasing guidance, $X.XX, X at our XXXX midpoint now AFFO by FFOs guidance to respectively. and penny Turning we our the

As from XX for year across you the line the our at open that our same are Please year-to-date operator, Q&A. increasing blended and range full performance we see can for to lets of by guidance. X% portfolio to guidance our basis remains additional store With midpoint. results, our our point XX refer Page strong, detail supplemental on

Operator

Thank go from you. Capital Sanabria [Operator BMO Juan And from Please comes our Instructions]. question Markets. ahead. first

Juan Sanabria

a July the changed? maybe looking Life morning. hoping increase and talk about put market seen opportunities a kind sought lab number little or Peter, demand you the Science has in of you in potential space bit after just could and or amount around being companies how Scott can by if the for or and space what or tenants characterize I was and number more in you've Good or how of increase of the

Peter A. Scott

Scott Pete. risk to that Yeah. our little in Scott tenant has and the I'll improving this But, with well. Hopeful the we Brinker year lab it. talked perhaps a start as that wants credit it's Hey, about bit Bohn to been space. just Maybe earlier or Juan, in profile add

don't that capital are also because but as improvement as in to what want saw I that a remarks this is prepared of the sequentially improving lot my quarter in of well. credit lot repeat I a said And We well. the markets profile

readouts couple think capital. $XX had you year-to-date, of a good raising billion stats success done data about when Just on that equity finding are deals tenants about you've follow of have deals, get

more that's it new billion for fact, at because Series seeing that new that market look got fact, has announced important And improved. strong, beat demand company M&A as that sequentially. deal A is another $X us. in raises was capital really in we're which capital M&A occurs well, venture It's that formation for as space morning. You the and improved is and this

portfolio our at now going right so are popular frequency actually time. with it's And then, We like, billion backwards saw that definitely public. So this in of mergers point in billion that a with $XX companies is XX more way merging [indiscernible]. reverse

as So, has right trending come ago. on But you for the I'd bit we say more there's But for a driving demand, things the backdrop. that's harbinger things than in a improved in that's feeling Obviously we of next July. what's saw certainly the direction individual signed better we leasing us, again, couple feel hope did quarters. the that And and today market. other really little each got are LOIs months that going to bit to in more led a little six at like

Juan Sanabria

increased then bump, what curious the range, confidence I on within that the the solid, just driver guidance what drove quarter question, second And typical follow-up the seemed there? just just MOB the our guess but on was

Thomas M. Klaritch

is Juan Yeah, Tom. this

operations positive basis and XX Medical contributed see and the points about to continued City, points quarter. We the XX for year basis for at that Dallas,

our addition, escalators X.XX% In remain of kind that range. at

rebounds results pandemic see to level that's continue parking and So our in where driving above income we're reduction. we

a our comp drive continues it. rent adjustments that our at at really some to expense said, in of that in -- XQ and we And to had was results. even some high as the We headwinds XXXX XQ that positives reconciliation So X.X%. abatements X.X% was and with billings. some And some you solid included against fairly had

about X.X% point impact. We XX about had have a at XQ So without that would those. basis been

Juan Sanabria

guys. you Thank

Operator

Mizuho. from Malhotra Vikram go ahead. from comes Please question next The

Vikram Malhotra

the taking Thanks questions. for

into sort help just think going you the or building Just looking potential a move Amgen you remains kind about leasing out. XXXX. can the trajectory Science made, but which is segment of for now as is for that upon Not guide, your comments given for Life known the Life of specific just us the is the given have it bumps, do I you and velocity looking if up, think today coming sustainability Science a

segment, about Let's sort today? Can you're they assuming up to assume of trends that talk are year able goes full for of not or potential leave remain the this intact just the to you it redef. as

Peter A. Scott

Pete Yeah, hey Vikram, it is here.

actually space is we've of to or the But expirations you focus leased level. until an while. LOIs and Amgen backfilled this there. a those leasing on On is buildings comment that's those a can't to of the now, our early ours. It's three next better planned a always been don't But, the in currently I year. of today, portion understand have we've known campus mentioned, to where those guys the and really and think and and right good vacate a year obviously pretty important significant that of that bit cove of And adjacent the end redevelop necessarily you for up bring a little are focus news see leases specificity. the I is re-leasing Amgen

So portion of that's the this. Amgen

sheet versus the other earnings look next look could to when to that to look couple the of things talked speak feel we good XXXX like. the there. driver, are a believe big as in of mark Sorrento, percentish Again, we have market portfolio, XX that's liquidation at the I place is at wanted number couple big accepting really It's we we to where pretty our in about, what consider a you great that I growth. shape. nice driver, pretty could current balance within But portfolio. I can't XXXX going the be think of be years, obviously rent the a And, market relative out, a rents to market in about mark a When leases point you still just that. to versus some

and time. actually necessarily pretty that backfilling. Amgen say on think than I getting just So we in them. working CAPEX Speakers]. what up didn't leases comment more much we can't leased we've on a XXXX, been in of be downtime lot explorations some actually, have those as point to associated XXXX But there'll with I at And until those disclosed, that actually previously some of this some [Multiple hard big

Scott M. Brinker

going having see come almost that at change space down over little the interest next year pretty months or so, we strong and TIs, we in last million very or just Board say basis discussions. in on LOIs bit rents, lab that clients you've the square and mean, X But existing a resulted rates maybe signed the with estate the The the about are expand to rates rents. starting despite real rates, than in the do same a had months, at of answer over of think XX on make easy XX% more are And XX outlook interest points. to part. Just existing likely leases of actually activity feet types of interest those was essentially management is interest to last were Obviously, I trajectory needs has for you just up most mark-to-markets. the time, space. not with leasing more got modest and that significant and where XXX teams to the probably

So really we more market a the mean, favorable. tough over favorable teeth XX last XX I success, we've the less pretty the had months, XX macro general not in to months, next the and see being environment significant over of

Vikram Malhotra

environment. sense. just rates That We or sort just unique going. of where this Pete, are a Scott, back, is maybe And even for a stepping follow-up, makes know my don't

at the next self-funded And changes whatever is? road? development, balance to would picture are the solid guess, delevering Pete there even into monetizing consider assuming just assets, you wondering, that down further You've there bigger we got, related I look transition as portfolio more you mentioned, opportunities buffer, that, specifically, as just opportunities create macro I'm to to you sheet. are or the

Scott M. Brinker

Yes, the answer is yes.

in that covered we remarks. So the prepared

later, We segment, will of others are this G&A, as base, lot strong sooner, aren't months, our is. going aren't XXX%, sheet, the is the tenant find our this development company I efficient maybe over having it's the that of to next But forward. those ours but downturn our with owners a sheets would strategy. is nearly lab to that well opportunities discussions. if mean is expectation central the attractive don't balance I will These are that be know their be longer-term portfolio assets necessarily platform, the in connected out shape bigger aren't There a same that balance coming XX-XX underway

well, So sheet be which good the downturn, yes, to opportunities put shape. right have our up there to really through weather I now Balance going to that for think and is is earnings. can we this are us things whole in mindset controlling great we continue

a think lot this. I the to opportunity side So other there's be of of yes, going on

Vikram Malhotra

Sorry, it that give potentially did you range, you said us -- in you? you could mean a like just big opportunity did, you noncore the monetizing and how when missed clarify, have you just I to broad might is if for remarks,

Scott M. Brinker

of on. couple a we're having it's Yes, million $XXX discussions that

We signed any haven't contracts.

So don't but like to our if assets opportunistic. don't we fund any only obviously pricing, we want sell sell We assets these pricing, talk the pipeline. to or would specific about I to are need

only of road do like us our rates and gives allow the repay do if accretively, down the us more the we we see cap which this flexibility is pricing. would we'd So And opportunities. that line credit our to expectation

Vikram Malhotra

you. Great, thank

Operator

Wurschmidt comes next The question from KeyBanc. from go Austin Please ahead.

Austin Wurschmidt

for portfolio development that and good morning everybody. -- With well discussions uptick respect And in you development are the Yes, just in some the across broadly leasing vacant active active thanks. the projects? of space to across the discussions, or is as the

Scott R. Bohn

San portfolio South stands. occupancy Francisco the just Bohn. portfolio. the of where it's across markets. lease space with the three have Diego, we core say across San versus would Austin, Obviously, I It's in it's all Scott to entire more Boston,

look about at of see those San we've it So the you are two thirds for today, LOIs South if the talked you'll spaces in there. of bulk Francisco. And

Austin Wurschmidt

$XXX,XXX in of And commence? is when leases just comprised the that any on leases, would some how I then for of a that, to development, LOI, active that clarification many under and the are you guess, expect the

Scott R. Bohn

too It's lease not on to got and still into the to we're we've individual today. to across finish going need these obviously just early. but get them we those, are LOIs line Austin, LOIs signatures and Yes, deals execution. mean, get the competitive I

So on next those come quarter. probably more to

Austin Wurschmidt

that the the touched then And MOB me, to MOBs Fair. last pull bit, doing the to could increasing But last success track record, what year high get half Clearly, company's quarter, are you little referenced But end this guidance drove of the just left could through you for quarter. or going one get guidance the you levers the in maybe just what said bump. that range. on a back of the to you XQ year. differently,

Thomas M. Klaritch

continue the LOIs got activity leases executed -- our really we we little we leasing. to are to lease for on year, Well, commencements where well above executions We've as in quite few a see place. have a bit and expected be good as

piece So occupancy of is to be it. a going

and end said earlier, at on our escalators we're mark-to-market, upper mark-to-market. the range I of typical As the

to City definitely couple going higher if some. to continues have to Medical And then push help quarters, up that's will that So another do end. us they well strong the of and

Scott M. Brinker

with both medical and if proceeds, are much tenants another like Austin, today spaces. anything smaller more they past segments, leases over willing having XX think spaces lot lab make was It activity months. interesting would XX management a Boards we're I of been to the sign over felt prospects big that teams commitments what's the last but or see than months. the conversations and had have bigger about We'll we that's also than in and

and store, any that earnings forward great it's into look if a into same sign. obviously, know don't I XXXX beyond, XXXX translates you but Now of or

Austin Wurschmidt

Yeah, that’s helpful. Thanks Scott.

Operator

from from question Nick Please next comes Scotiabank. go The ahead. Yulico

Nicholas Yulico

morning. I of you any what this are is expirations there good the because think guess -- expect about Thanks, just of trying that or next and of occupancy facing renew portfolio of year, lab over not look tenants to is the year, quantify of potential how you maybe re-tenant terms base, of about think to question factors kind some just some we would you way of piece that that like proactively and credit in or think tenant the to year? first the to just some issues in as next portfolio the lease the those should you other phasing understand

Scott M. Brinker

of and is Oyster half it Point Grand. Pointe Roughly

of that remain are and XXXX lab I the maturities billings XXXX half So remaining to because going the lease to need in into just redeveloped assume redevelopment be competitive.

to the I'll maybe XX% Bohn Scott remaining For ask comment.

Scott R. Bohn

I square talked half until come XXXX, about about we've rollover And that going unaddressed XXX,XXX through we bulk only buildings maturities Yes. the Amgen back feet XXXX. excluding into mean that the doesn't the of of redevelopment. got of

the next we're just months. getting into on really So the leases renewal those windows over few

upcoming to but come in into very across So year rollover and the kind manageable portfolio, of the of more quarters, XXXX. this balance lease

Nicholas Yulico

some terms on you remain correct, on you. now, earlier more San talked Cambridge that's markets thank in maybe thoughts on right Greater in when are great, is stable, just the outperforming of Boston, just kind you're of guess, the you question And the Okay, are lab guys sort the in you there are rents going is are vacancy market where just like any competitive seem of going South market? to it second just they the I what concessions whether market, portfolio, is like you're the leasing across any but feels -- mark-to-market see viewpoint realizing Francisco, to market, seeing hit more about

Scott R. Bohn

Scott Nick, it's again. once

in held I we expect Healthpeak like face A all strong signed I'd probably strong Rates have leases with A locations well. rates terms. and have in which three near I that I and would all this looking as at to buildings up we for flattened the think Overall, say the in markets at know, foremost, deal been first and the rates, they we've term. say LOIs think continue year, really sponsorship

pressure of Luckily, net really From that a that capital effective more all lot or the about perspective, a between some have we product a a buildings in don't some little then that we've seen secondary put change any. to with in we're runways, bifurcation no the incremental locations. talked and end little XXXX. that about on in at You've that this real looking by TIs last. tenants tenant etcetera. We TIs, and XXXX would to cases have B on and on to quarter of select depending the landlord getting open credit, back to usability, versus say But extend I cash talked

So I and those leveled TI levels I mean, think ask that those have off.

Nicholas Yulico

it. appreciate Scott, Thanks

Operator

Siversky go The from next from question comes ahead. Wells Fargo. Connor Please

Connor Siversky

with morning, the Good of thank facilities for in have outpatient comment, the you how putting prepared off-campus? on XX trends that hospital. shift for office seeing outpatient the sorry? then I'm Progressive shovels the time. the And remarks every continues in does take performance Interesting for what peak to or strategy, In versus on-campus comment that for ground start align to medical, it in delivery peak Systems mean, now Health again context I if you're wondering medical

Scott M. Brinker

is news ever. hospitals busier good the are Well, Yes. than the

we're well ones of a the or the of campus tour redevelopment. undergoing them least as expansion at number we So and those on obviously, are

growing they extremely It's health the their the market is total expanding. are and just remain So share systems profitable. pie

So itself ever. is a but as and lot growth campus hospital the outpatient busy the as off-campus of is

do want the today. the see to we take the it negative having don't you more align what grow our with comment the to business own impact plan itself. underlying actual in growth want The I as Klaritch, So other. portfolio, we business is we on forward-looking a

Thomas M. Klaritch

so, the think was putting and shovels is ground, with we're to two or quarters probably more development I announce, announce ago, building, discussions some them, few Yes. which them quarter with active With our have it HCA we also a the did with in quite in next and buildings regards in our with Savannah there. program we'll to

there's demand pent-up lot development for MOB of So there. a out

In with addition three HCA, potential two systems about we're with buildings them. other new to having or discussions

think get the So pretty over active next to I going it's year.

Scott M. Brinker

when I cost name brand depends decision systems health things, interest the mean we'll sense. and than to spread particular, rates us obviously make demand in proceed normal the see to of pre-leasing. big all saying, but to on on different capital cap I pull There's right. mean, trigger, and to pipeline acquisition definitely partner and yes, do pretty from obviously, numbers start we the with development a returns a is the

Connor Siversky

And revenue speaking, you helpful. administrative how cycle then could you offer the all hybrid color functions environment how quantify or just That's do maybe space call it, outpatient, see utilized to broadly operations? much of any you. by, at Thank impacting more sticking is or work that or outpatient

Thomas M. Klaritch

It's We XXs, of and never HCA is just they other XX -- interesting. percent conversation home. work that not from the to had their going with It's XXs day estimate workforce low high probably practical.

the look you If space at across and office look amount that is back we specifically, pretty portfolio, administrative to of when the or our portfolio at as asked X% seems you probably XX% stable.

that move really We haven't of out a had area. any -- seen lot we haven't in

continues there. So demand to the be

Connor Siversky

you. Okay, thank

Operator

Dennerlein ahead. Joshua go of America. from from comes question Please next Bank The

Joshua Dennerlein

guys. Hey,

is Just the When look to at year-to-date, questions range. had tracking XX.X% but range your CCRCs, NOI your year X% you're full guidance same-store it some I like on looks XX%.

you're what half there? Just kind the curious expecting of back in

Peter A. Scott

what Yes, and generally businesses. we within year looks year think on of about to of just a relative maybe the like second take half one the second talk that, half Josh each the the of I'll our first

look you If year-to-date at total we're growth, at right. same-store X%,

healthy just at our was bit a high So now. right range, above of which It's guidance pretty X.XX% little strong end the number. actually

every of the do keep year, the So medical momentum months six of going. to guidance, high the a Tom start first end. push day our hope actually. Into we we're year, little we're outpatient really that the the through had to a off year-to-date, get better half CCRC in maybe to of the year. Klaritch at we half with a X.X%, of line right the which has bit second strong and And I on is first how good midpoint

we've he CFO. thinks guidance But every on I'm year the high I record of much had end I've success that. getting to So been think broken that a our range pretty

much too this of more second the hopefully, to us, on put that for for pressure the So on half year to Tom. year come not

of really of the But look, that a then two the we we on don't out impact half We the little but backfill pay of is We second probably year. XX have out XX strong just still first in we backfilled you the second this list. needs a remarks. quarter. point Kodiak list. some And There a lab to remind then that half of our does to biggest But it items half our had little attention got bit I the that; there has the year. had space quarter. overall of in are quarter. a not second Revolution until second year. space, next the our same-store an I prepared in back downtime that wanted if everybody, it probably that, bit Xst the piece, that begin the NOI. about backfilled of close Medicines one to impacting space in could to We There January good mentioned lease top past Adverum get on of is my deceleration dropped top be is

will year. same-store Sciences NOI have the wanted half. back half an to as really the second that Life out decel So occupancy impact But items that drive on half there's in some year biggest of that the two the point second downtime of as the in well the will in I in certainly

Joshua Dennerlein

guys like them. restart the was. This Life of your the remember of mentioned you looking side. pipeline? to tenants given What the is think for just you just -- That's and might have actually, portfolio Appreciate Science occupancy I couple I NAREIT, for come didn't a at Maybe get sounds you It that. where would space you to super development just helpful. guys space have kind on on

Scott M. Brinker

Well, to get to today. be mean I the a be you and us line something far wouldn't need Yes. tenant would time than it coming longer permits the today. build accommodating space tenant

lease unlikely So who seeing wants terminate early re-tenanting credits renew longer-term find to space backfill the near-term with that can years a looking way a we if commitment. is thought the the towards on process in really tenant growing and and to coming a are

back markets get XXXX, core entitlements outpatient start and the depends in something we'd position on to that and supply really and good lot of where our would of on potentially I comment of view in actually In about that start on demand, terms construction more like. are pre-leasing capital development starts, my we medical. decision potentially I The be the progress making new to a returns a in made to cost

So it's existing are would the ones we'll turn do and generally But base see a new pretty developments. huge we've mean, can into obviously I we look that not quickly, the as something up of tenants today. XXXX, you filling got that these market

Joshua Dennerlein

you. thank it, Appreciate

Operator

Griffin comes question Please next go Citi. from ahead. from The Michael

Michael Griffin

portfolio growing just order comfortable retention you tenants Great, you of to sort the longer-term for forward? that entering you XX% number achieve in are from tenant thanks. existing Science, to Maybe with Life talked existing leasing the your of new to on about need drive growth see tenants. growth Do base or going

Scott R. Bohn

-- huge Scott tenants. the the mean markets. you we competitive existing we mean, XX% with Sure, think what welcome certainly That's in we're done, someone of Bohn. we advantage as the well. a at local tenants with that's scale do I to I it's obviously, said, easier It's That from said, hey know. is outside deal as a have is Greg, I ours. least we've

So it's are base to share cater of but leasing to I well, of to capture certainly we client try their But growth. from a portfolio tenants we as our mix best accommodate fair think of can outside our that as both. our

Michael Griffin

and of out reports mean, elevated back at portfolio, sit I supply supply. on But can about Thanks. and color can any your has you then if And and of I lot XXXX a early, expectations stock, does how you a stock? as helpful? if you supply competitive your would question in And know I but then market this look give for then anything biotech be just XXXX competitive I kind your there core a add to your well, markets. it's there compare on know been mean bit

Scott R. Bohn

from change supply we deliveries. mean a that of about in a XXXX ton quarter last XXXX, talked the perspective, From Yes. I not

in conversions advertised doing have on many As that spec a expect, of in we're new been you'd certainly slowdown basis. seeing starts aren't a the anything

the built equal. don't supply before, of we we've in all as So count not And even those is competitive many really noted supply.

delivering About that competitive into third There's less to feet square about our Bay positioned coming we XXXX, Peninsula. we North the very feet product. in supply, square pre-leased XX% well XXX,XXX think X about When Area, of you competitive to that a million So at look It's we each think portfolio. our space that of XXXX. our to about in the new we're is conversion in it's be competitive is markets. is think going

X.X competitive. that about view feet as of we square million So

small actual The good South it's Francisco that is in of projects. a news on number

small projects. So of decent but amount number a of it's a footage, square

XX So on there today, really very We feet. out a our there against little deals, million you're projects, there. no competing and where as over look big shrinks competing at going development when truly and and headline down X Waltham rollover to we competitive portfolio certainly you're smaller Boston, have right, ongoing out there. number about little West are thinking It in some Lexington Cambridge square numbers. not is

positioning preleased. good Pines So in in as our starts square only about no the Diego, but in about total Then development that million That's near entitlements. anywhere we there's million is Mesa. again, construction, of our through feet X work under in San and feel X Tory about and Airwave about Sorrento XX% we there term

So as whittle manageable view to actually down the in when we it's you competitive, pretty near term. what

Scott M. Brinker

thing, Griff, -- every Hey situation other and different. one this is

general, in noticed what anything, bit to true new that's we've harder environment projects, in development But if a been statement the board. a the this isn't across that this up. lease is So have

in rents per A could the invest is ask expenses, that's lease If basis. usually as you $XXX program, it foot at depending higher be tenant TI, with $XXX, $XXX least think needs the a a amenities about $XXX, going as cost environment. upon already development and to this to new operating tough their come of given the higher new just development, well

competitive. it's less So just

of the of the demand from in well lower only that's X tenant a it's real exact investment buildings most plus are like TI You of desirable rent, as price think kind well is the and in of located, estate is opposite. the right still what's office, today. now polar sector actually [indiscernible] about in opposite OPEX just point a as kind happening ones that leasing Lab the up. It's terms

We So lease have do we're actually obviously. new development up, benefiting to from a some that bit. quite

not about I actually over better we're that deliveries think next the completely puts So dynamic, kind going immune but it weather shape the portfolios who's as incumbents of think, the to in XX-XX from with even months. existing operating you

Michael Griffin

for me. Thanks for time. the it that’s Great,

Operator

from Kamdem go Stanley. Please question ahead. comes Ronald next The from Morgan

Ronald Kamdem

two just or Hey, one a ones say. should and quick follow-up, I

Just think you the November on the lab total last peak NOI talked portfolio, opportunity. think about I I about in $X.X billion

those. into billion development was just that you of lab well or of $X.X incremental year half lab part think or as how sort from earnings what are, puts can the there about do you talk mark-to-market, XXXX sort I the in upside incremental of it opportunity as about a is and feel that plus downside? Maybe takes

Peter A. Scott

Ron, hey Pete it's Yeah, here.

that development the shouldn't a pipeline. be new feel would I that, billion NOI and may we basically within take still little million you're say was NOI was starts existing $XXX the a of growth over we stabilization lease-up get include development it think about didn't that the surprise. growth And to I good today; That of about opportunity $X.X years. the three referring to longer there.

was So starts feeding there were no new that. into that

get just bit a question. longer it. it's there. Again, So about take a good little may It we to feel good

Ronald Kamdem

guidance, know has then and different And ways. Great. been lot on just this of I asked a the lab

at So too. stab it, I'll a take

is the So so -- last, bottom bottom the range is NOI top months the -- end the can that to of contemplated? wide same-store talk with that and why like five the about Thanks. you being top mostly the the range, and end X% is of X.X% just end at that year Sorrento, what's

Peter A. Scott

me, third two year two I'd think hitting right or the the within within six segment. first still or excuse tighten year. beginning year. with range the conservatism soon year, guidance midpoint out say months quarters us at and have that the at the too the some I into good the little that through the likes that. and/or still more point to obviously, And a in midpoint we're we range consider unknown Sorrento get say of our to feel increase issues we along we the in But item we as but or biggest with of tenant when we try I embed any now, get to the Look, it's credit about increasing either call. come is the months the right trim quarter would you do Yes. for fall the further Kodiak. We of the like

Ronald Kamdem

much. so Thanks

Operator

comes from question Please next Valiquette Barclays. go The from Steven ahead.

Steven Valiquette

Yeah, thanks. Good morning guys.

But Thanks. medical is whether transaction. both just industry versus question any you here way I'm are transactions? my in you curious Volumes if guess year LS either shifts rates the industry direction cap despite just and in Just this, on I can industry or down Life directional medical this comment again around recent office Science recent noticed historical averages, obviously just and office. in

Scott M. Brinker

a They're to well. couple that XXX points, I as to XXX, enough from thinking XX peak has a look the whether months per rate lab or months view draw IRRs a been foot recaps, the Do it any in last you have pricing volume that the like space in about A there's Obviously, There's feel ago, are no know definitely you but but cap been I of have buyers activity on pretty at noteworthy. the don't the is not that difference been basis. conclusions. that on the strong, happened definitively? just outpatient lot of up have different transactions more price basis a Tom? state there's

Thomas M. Klaritch

the a been since spike pretty quarters saw transactions. No, ago, of there We three been two same. I and it's mean, hasn't then. consistent to lot just

Steven Valiquette

fair. that’s Okay,

Okay, thanks.

Operator

question comes from next Michael go Mueller ahead. The Morgan. J.P. from Please

Michael Mueller

Thanks, hi.

Dallas much much ad say, you City guess the two then years? that normal? occupancy how how from the was of the think ones CCRC XQ over on do Med first, can was where here. next and I front, go three And in quick Just rent above

Scott M. Brinker

On about the ad we to million rent, $X.X quarter. a $X.X million run typically

high Where up as about we've as it's $X last So X% million. from year. had

forward. moving we're upper portfolio that Xs X.X% Yes, then kind XX%. of independent the be range, CCRC is and So to That around it's going mostly to living. today, in

to So entry. and then barriers there's of longer length stay big

essentially campuses two into one don't today. XX% get well. I can So that we back range as hopefully, from XX% no there's do mean, or new supply. We've got the

basis. So that current may in go. progress our for at NOI quite but recovered, business, we that at be it date, where But a still is the to a Occupancies essentially have in upper least good bit of a occupancy to cash to environment. least XXXX, the on limit on was end back

that for upside get portfolio. yes, So

Thomas M. Klaritch

Sorry, this is Tom again.

monthly Just I to clarify, the was numbers. our is numbers quoting

quarter, between $X and $X for So the million million. it's

Michael Mueller

Got it, you. thank okay,

Operator

go comes question Street. Green Please ahead. from from next John Pawlowski The

John Pawlowski

thanks about Brinker, for to sell just question I follow-up the assets. morning, the the dispositions time. or appetite a Scott had Good

aren't market Just curious with close the and assets why on pretty public values? resilient the pricing to between properties private disconnect Science private market curious you Life selling have aggressively help more traded, that

Scott M. Brinker

have Well, assets and to Yes. sold we more. sell look just to we're year-to-date going some we said

today. not but A some that and more to to point, strategy. And campuses that to. Obviously, sentiment, feel It's core super tougher that. easy core some assets desirable think forever, That don't We our assets spot transact our exactly We it's balance negative view perspective, been and So clusters. highly market sheet as feels lately. we I have we not by an it may from but buyers, lasts comes within goes. in big don't that, best mean, our a we're expectation. but sell that At -- like to consider like At in, need that the certainly, certainly. don't doing for to is we that least we're move. maybe

better today, lot I a fundamentals the than results think are the sentiment. the

we'll if in look asset quarters, we'll then to coming if that additional transpires sales. continue the So at fact not, in see

John Pawlowski

right Okay. million $XXX now mind range But in likely? of dispositions your is a in the size of couple

Scott M. Brinker

Yes. right.

John Pawlowski

capital any Life in just where rents for a in from portfolio, Science concession Okay. me. in years studies different work last or Curious on uptick back environment? Last you you've operators kind accommodate the post-COVID just space of case seen certain the the an maybe to space your spending utilization office question of requiring from lower in is to if patterns repurpose few

Scott M. Brinker

spaces. sign existing and space ago, really hasn't and I we so million changed. more the collaboration of feet between three years square both mean, leases since And lab X the spaces than COVID, the new allocation John,

look the and So But really understand and releases the changed we headlines tenants real buildings, mix and at real the when theories. hasn't much.

assets that. we lot accommodate little a and not our that. A the flex purpose-built struggle actually it seen So properties have bit could, can the in future, Could type it sure, of redevelopment could labs not the we're XX%, to, of but get whereas up seeing they just purpose-built XX% lab lab, go XX% to needed to Scott, our to, don't if that. mix, I know,

John Pawlowski

you. sense. Thank makes Okay,

Operator

Please from The next Golladay comes from go Wes Baird. ahead. question

Wes Golladay

Hey, or more in good or an tenants uptick with of that to is want seeing been the to or in the broad-based that go morning back biotech everyone. tenants. comment that between? anything I about discussion pharma lab Has

Scott R. Bohn

talking Series to it's formation probably time VC broad-based. tenants. formation lot on, foot There's on. square more type the lot startups. of a favoring talking as going A about spent as of is lot our company think There's company a going large-scale pharma well both We sub I XX,XXX funding activity of clients a

environment. macro have Series B, the that on ones in that still C just probably are over comfortable range interest and feel more rate Scott early public and the to that mentioned, more and companies clarity of those the think are are I starting as now kind

coming are well from they're spectrum about So perspective. tenant over we expect we of funding broad the well as the activity at the next to as a range see in overall, few more a the of talked But where as sizes of as LOIs kind months. that

Wes Golladay

lot you if so, do quickly have on contingent Okay, space? traction and And leases if some potential then turn they get for rejected? Sorrento of you do how can space the a the

Peter A. Scott

were with planning projected. I do obviously Yes. regards we I on Sorrento if with mean we think have assets contingency they those would what to

regards if But thing and delving leases were market say and and to four could what capital Those clearly pretty positive to a us leases, that in to different they those have like the too As trying package for the downtime They're the I individual the achieve significant varies I think but some my prepared generally across rents. would exit soon Too leases. spend soon that. TIs mean, actually properties. reject feel be and together leases with means looking properties would said to I that to But obviously, it's some now. for necessarily there put that bankruptcy financing today right to again, liquidate. I not start that remarks, into be below comment existing on rejected, to we

Wes Golladay

the for thanks time everyone. Great, Okay.

Operator

Please The next from go comes Jim Kammert from Evercore. ahead. question

James Kammert

Thank Hey, morning. good you.

retention have tenants likely you that lab it Given examples And last are assume any if safe in price where side, less the do is will? the high to existing those you to XX-XX months the stuck but able lab be new the Thank with in might to have or tenants in leasing at something where down shoppers, development go with the street a a rent, they done PEAK? side you've to been lower you.

Scott R. Bohn

Yes, to There's Scott goes it's labs. at within FDA move that to of of labs the the mean approvals are a those there's lot relocate. hard certain Labs that -- aren't easy Bohn. into I of build-out end day. the

oftentimes, tenant to actual the in, mean, than that, per from that balance price times, square portfolio the that So labs I one most landlord street, the a that's of always I think the relatively speak. actual sophistication, tend heavier to them thing isn't also the option important down foot think sticky. weighs much most thing so perspective. sheet, be cheaper I to

James Kammert

Alright.

I'm but to a you to as bump that's have opposed -- in extract from you been curious do so a them the words? nice can if other able insulating them you supply, examples just you were maybe keep and And phenomenon where new moving,

Scott R. Bohn

a think with oftentimes, to have I think over if don't To a know we not mean Yes, amounts gives if advantage. within even grown from and be the honest you, differentiates slide square last one good And to November our if past have deal. us XXX,XXX, from us more that we small the Jim. of square our question, actually gone It's back the deck about us actually, talking competitive a down us and that with with turned of included tenant it's that things than another year, of we we and they're feet NAREIT just and to you tenants us. expanding portfolio. go I footage in well

sure example, been amount landlords. except not that and of the from of can lot the the I years, a amount of we've continuing square have specific that's footage to footage incumbent to I'm gone small like to a So all competitive the give a square advantage we point for through that a us pound with think tenants to table

Scott M. Brinker

against -- many two too Obviously, a rare don't on of maybe on to those, big Scott coming like leases. Yes, us aggressively like I one of Mike that's a landlord, bidding we're have to front they're are us situation. where recollection lines, talking or another of any wars. but the strong and the but them very bidding there's

James Kammert

you. thank Perfect,

Operator

closing Scott Brinker for any to back our over I remarks. This session. turn question-and-answer like to concludes the would conference

Scott M. Brinker

for see rest lot conference. Thanks, Yes. joining. We'll America everyone, of of at September in Thanks. summer. a the you the Enjoy of your Bank

Operator

attending Conference for has you now concluded. Thank today's presentation.

disconnect. may You now

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.