Major Healthcare REIT’s Report Q2 Results

Welltower, HTA, HCP and Physicians Realty Trust Report Q2 Results

This is one of the months of the year in which a majority of quarterly corporate earnings are released to the public. This past week, four of the major Healthcare REIT’s: Welltower, Healthcare Trust of America Inc., HCP Inc. and Physicians Realty Trust reported their results for the second quarter of 2017. Below are excerpts of the press releases with links to the full press release.

Welltower Reports Second Quarter 2017 Results

TOLEDO, Ohio, July 28, 2017 /PRNewswire/ — Welltower Inc. (NYSE: HCN) today announced results for the quarter ended June 30, 2017. For the quarter, we generated net income attributable to common stockholders of $0.51 per share and normalized FFO attributable to common stockholders of $1.06 per share.

Quarterly Highlights

  • Seniors housing operating SSNOI grew 3.5% and SS REVPOR grew 3.9%
  • Increasing total SSNOI guidance to 2.25%-3% from 2%-3% due to stronger 1H17 seniors housing operating performance
  • Net debt to undepreciated book capitalization declined to 35.0% from 39.2% at 6/30/16
  • Net debt to adjusted EBITDA improved to 5.17x from 5.47x in 2Q16

Investment and Disposition Activity We completed $292 million of pro rata gross investments for the quarter including $110 million in acquisitions/JVs, $162 million in development funding and $20 million in loans. 92% of these investments were completed with existing relationships. Acquisitions/JVs were comprised of four separate transactions at a blended yield of 6.5%. The development fundings are expected to yield 7.8% upon stabilization and the loans were made at a blended rate of 6.6%. We also placed into service 10 development projects totaling $273 million at a blended stabilized yield of 7.6%. Also during the quarter, we completed total dispositions of $160 million consisting of loan payoffs of $43 million at an average yield of 8.9% and property sales of $117 million at a blended yield on proceeds of 9.3%.

▸  Read the full press release here.

Healthcare Trust of America, Inc. Reports Second Quarter 2017 Earnings

SCOTTSDALE, Ariz., July 31, 2017 /PRNewswire/ — Healthcare Trust of America, Inc. (NYSE: HTA) (“HTA”) announced results for the three and six months ended June 30, 2017.

Second Quarter 2017 Highlights

  • Net Income (Loss) Attributable to Common Stockholders: Decreased to $(5.9) million net loss, compared to Q2 2016. Earnings per diluted share decreased to $(0.03) per diluted share, compared to Q2 2016. Total revenues increased $26.6 million due to the continued growth in HTA’s operations, however, the increase in revenues was primarily offset by the increase in transaction expenses related to second quarter investments, including the loss on extinguishment of debt related to the bridge facility fees paid in connection with the Duke acquisition.
  • Funds From Operations (“FFO”): As defined by the National Association of Real Estate Investment Trusts (“NAREIT”), increased 1.7%, to $54.2 million, compared to Q2 2016. FFO per diluted share decreased 21.1%, to $0.30 per diluted share, compared to Q2 2016.
  • Normalized FFO: Increased 23.3%, to $69.6 million, compared to Q2 2016.
  • Normalized FFO per diluted share decreased 2.5%, to $0.39 per diluted share, compared to Q2 2016.
  • Normalized Funds Available for Distribution (“FAD”): Increased 21.1%, to $60.6 million, compared to Q2 2016.
  • Same-Property Cash Net Operating Income (“NOI”): Increased $2.2 million, or 3.1%, to $75.0 million, compared to Q2 2016. Same-Property rental revenue increased $1.6 million, or 1.9%, to $85.6 million, compared to Q2 2016.

▸ Read the full press release here.

HCP Announces Results for the Quarter Ended June 30, 2017

IRVINE, Calif., Aug. 1, 2017 /PRNewswire/ — HCP Inc. (NYSE: HCP) announced results for the quarter ended June, 30, 2017.

SECOND QUARTER 2017 AND RECENT HIGHLIGHTS

  • EPS, FFO and FFO as adjusted per share, were $0.04, $0.35 and $0.48, respectively
  • Achieved year-over-year three- and six-month SPP Cash NOI growth of 2.1% and 3.1%, respectively
  • Completed or under contract on $75 million of acquisitions and generated $399 million of proceeds from dispositions and loan repayments through August 1st
  • Announced $116 million of new development and redevelopment projects
  • Repurchased $500 million of our 5.375% senior notes due 2021 and remain on-track to meeting our previously disclosed leverage targets
  • Entered into a definitive agreement to sell our Tandem debt investment for $197 million
  • Enhanced corporate governance by opting out of the Maryland Unsolicited Takeovers Act (MUTA) and adopting majority standard voting
  • Announced Scott Brinker will join as EVP Chief Investment Officer, effective January 2018
  • Reaffirmed full-year 2017 FFO as adjusted and SPP Cash NOI guidance ranges

TRANSACTION ACTIVITY

ACQUISITIONS

During the second quarter and through August 1, 2017, we announced $75 million of acquisitions.

  • In June, we acquired Wateridge, a 124,000 square foot campus in the Sorrento Mesa submarket of San Diego for $26 million. Upon acquisition, we commenced repositioning one of the buildings into class-A lab space following an office-to-lab conversion strategy.
  • In July, we acquired a portfolio of three medical office buildings in Texas for $49 million.

LOAN REPAYMENTS AND DISPOSITIONS

During the second quarter we received $399 million of proceeds from loan repayments and dispositions. Significant transactions included:

  • In June, the HC-One mezzanine loan was repaid generating $367 million of proceeds. We have now exited substantially all of our U.K. debt investments.
  • As previously disclosed, in April, we sold a land parcel in San Diego, California for $27 million.

DEVELOPMENT AND REDEVELOPMENT

At quarter end, our development pipeline totaled $640 million and is expected to produce a weighted average stabilized yield 150-200 basis points over respective market cap rates. During the quarter we placed $65 million of development in service, including $41 million at Phase I of The Cove, our premier $720 million, class-A life science development project in South San Francisco.

Our redevelopment pipeline totals $109 million and is expected to produce a weighted average return on incremental capital of 9-12%.

During the second quarter and through July, we added $116 million of new projects to our development and redevelopment pipelines including:

  • Commenced $22 million of redevelopment projects at two recently-acquired life science assets in the Sorrento Mesa submarket of San Diego.
  • Commenced a $40 million redevelopment of a medical office building located in the University City submarket in Philadelphia near the University of Pennsylvania.
  • Entered into a joint venture agreement and commenced development on a 111 unit senior housing facility in Otay Ranch, California (San Diego MSA) for $31 million. Our share of the total construction cost is approximately $28 million with an estimated completion in the second half of 2018.
  • In July, commenced development on a 79 unit senior housing facility in Waldwick, New Jersey (New York MSA) for $31 million. Our share of the total construction costs is approximately $26 million with an estimated completion in late 2018.

▸  Read the full press release here.

Physicians Realty Trust Reports Second Quarter 2017 Financial Results

DocREIT logoMILWAUKEE–(BUSINESS WIRE)–Physicians Realty Trust (NYSE: DOC) (the “Company,” the “Trust,” “we,” “our” and “us”), a self-managed healthcare real estate investment trust, today announced results for the second quarter ended June 30, 2017.

Announces Second Quarter 2017 Investment Activity of $588.2 Million and Year-to-Date Investment Activity of $836.5 Million

Second Quarter Highlights:

  • Reported second quarter 2017 total revenue of $76.6 million, up 43.9% year-over-year.
  • Generated second quarter net income per share and OP unit of $0.06 on a fully diluted basis, compared to $0.05 per share and OP unit on a fully diluted basis for the same period last year.
  • Generated second quarter normalized funds from operations (FFO) of $0.24 per share and OP unit on a fully diluted basis, up 9.1% year-over-year.
  • Completed second quarter investments of approximately $588.2 million, which included 13 healthcare facilities, totaling 1,284,276 leasable square feet.
  • Declared a quarterly dividend of $0.23 per share and OP unit for the second quarter 2017, representing an increase of $0.005 relative to the previous quarter, paid July 18, 2017.
  • Portfolio was 96.3% leased based on square footage as of June 30, 2017.
  • Increased gross leasable square footage by 10.6% in the second quarter 2017 to 12,596,009 square feet from 11,391,821 as of March 31, 2017.
  • Same-Store Cash Net Operating Income (NOI) growth was 1.0% year over year.

Second Quarter Investment Activity

In the quarter ended June 30, 2017, the Company completed property acquisitions representing an aggregate of 1,284,276 net leasable square feet for an aggregate purchase price of approximately $581.9 million. Total investment activity for the quarter was approximately $588.2 million.

Since our June 28, 2017 press release and through June 30, 2017, the Company completed acquisitions containing an aggregate of 1,223,436 net rentable square feet for $562.3 million. Certain of these investments are described below.

  • 2017 CHI Portfolio – Tranche 1 – The Company’s operating partnership entered into two separate purchase and sale agreements with certain subsidiaries and affiliates of Catholic Health Initiatives (“CHI”) to acquire 13 medical office facilities located in six states, comprising approximately 676,745 net leasable square feet for an aggregate purchase price of approximately $157.1 million, subject to closing prorations and other adjustments (the “2017 CHI Portfolio”). The 2017 CHI Portfolio is 98.8% leased and the weighted average lease term remaining is 9.3 years. On June 29, 2017, the Company closed on the acquisition of eight medical office buildings totaling 492,338 square feet located in Arkansas, Minnesota, North Dakota, Nebraska, Tennessee, and Texas for a purchase price of $124.2 million (“Tranche 1”). The 2017 CHI Portfolio is expected to produce an unlevered yield of approximately 6.8%.
  • St. Vincent Carmel Women’s Center – On June 29, 2017, the Company closed the acquisition of an 85,847 square foot medical office facility in Carmel, Indiana, for a purchase price of approximately $33.1 million. This multi-tenant facility is 87% leased with 73% occupied by St. Vincent Health for a remaining term of approximately 6 years.
  • St. Vincent Fishers Medical Center – On June 29, 2017, the Company closed the acquisition of a 120,158 square foot medical office facility in Fishers, Indiana, for a purchase price of approximately $60.8 million. This multi-tenant facility is 100% leased with 86% occupied by various 10-year St. Vincent Health leases. These medical office buildings were acquired from St. Vincent upon exercise of its rights of first refusal in connection with the sale of the Duke Realty Healthcare portfolio.
  • The first year unlevered yield on the St. Vincent investments described above is expected to be approximately 4.7%.
  • Baylor Charles A. Sammons Cancer Center – On June 30, 2017 the Company closed the acquisition of a 458,396 square foot medical office facility in Dallas, Texas, for a purchase price of approximately $290.0 million. This multi-tenant facility is 95% leased with 40% occupied by U.S. Oncology (McKesson) and 55% occupied by Baylor Health Care. This 10-story medical office building was built in 2011 and has 8.6 years remaining on the in-place leases. This property was acquired from BCC Cancer Center Venture, L.P. upon exercise of its rights of first refusal in connection with the sale of the Duke Realty Healthcare portfolio. The first year unlevered yield on this investment is expected to be approximately 4.7%.
  • Orthopedic & Sports Institute of the Fox Valley – On June 30, 2017 the Company closed the acquisition of a 66,697 square foot medical office facility in Appleton, Wisconsin, for a purchase price of approximately $27.9 million. This facility is 100% leased by a group of physicians under NOVO Health. The facility includes a 4-operating room surgery center, and imaging center with MRI, physical therapy, and an extended-stay recovery facility. The first year unlevered yield on this investment is expected to be approximately 6.5%.
  • On April 7, 2017, we sold four medical office buildings, representing an aggregate 80,292 square feet, in Georgia for approximately $18.2 million and recognized a gain on the sale of approximately $5.3 million.

▸  Read the full press release here.

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