Healthpeak Properties Inc (NYSE:DOC) Reports Strong Q3 Earnings, Beating FFO and Revenue Estimates

Healthpeak Properties Inc (NYSE:DOC) reported third-quarter financial results that demonstrated operational strength, with key financial metrics surpassing analyst expectations despite a net loss for the period. The healthcare real estate investment trust posted funds from operations as adjusted of $0.46 per share, significantly exceeding the $0.0563 consensus estimate. Revenue for the quarter reached $705.87 million, also beating analyst projections of $699.31 million.

Financial Performance Versus Expectations

The company's core operational performance showed resilience across several key metrics:

• FFO as Adjusted: $0.46 per share versus $0.0563 estimate
• Revenue: $705.87 million versus $699.31 million estimate
• AFFO: $0.42 per share, maintaining stability year-over-year
• Net loss: $(0.17) per share, primarily impacted by non-cash items

The substantial beat on FFO, which is a crucial profitability metric for REITs, indicates stronger underlying operational performance than anticipated. Management noted that the company's strong balance sheet, with net debt to adjusted EBITDAre of 5.3x, and well-covered dividend with a 71% AFFO payout ratio year-to-date, remain key strengths.

Market Reaction and Strategic Positioning

Following the earnings release, market reaction has been muted with minimal after-hours movement, suggesting investors are digestering the mixed results that show operational strength alongside a reported net loss. The stock has shown slight volatility in recent weeks, with a 0.59% gain over the past week offset by a 1.22% decline over the past two weeks.

The company's strategic initiatives appear to be gaining traction, particularly in their outpatient medical segment where demand is growing faster than new supply. This dynamic is driving healthy cash re-leasing spreads of 5.4% in the quarter and higher annual escalators. Total occupancy increased by 10 basis points sequentially, reflecting steady portfolio performance.

Portfolio Performance and Outlook

Healthpeak's diverse property types showed varying performance trends:

• Outpatient Medical: 2.0% same-store NOI growth representing 56.1% of portfolio
• Lab: (3.2%) same-store NOI decline representing 33.3% of portfolio
• CCRC: 9.4% same-store NOI growth representing 10.6% of portfolio

The company reaffirmed its full-year 2025 guidance for FFO per share between $1.81-$1.87 and same-store NOI growth of 3.0%-4.0%, suggesting management confidence in the remainder of the year. This outlook compares to analyst estimates of $0.0577 for Q4 2025 EPS and $0.2247 for full-year 2025 EPS, though direct comparison is complicated by differing metrics.

Management highlighted potential capital recycling opportunities, noting they are in various stages of negotiation on opportunistic sales and recapitalizations that could generate proceeds of $1 billion or more. These funds would be used to strengthen the balance sheet and reinvest in development opportunities.

Operational Highlights and Leasing Activity

The company executed 1.5 million square feet of leases during the quarter, with particularly strong activity in outpatient medical properties comprising 1.2 million square feet. Subsequent to quarter-end, the pipeline remains robust with signed letters of intent on an additional 895,000 square feet of outpatient medical space.

The lab segment, while experiencing some softness in occupancy, is showing signs of potential inflection according to management commentary. Leasing activity has picked up with the pipeline at its highest level since Q2 2024, suggesting improving conditions in the biopharma sector.

For more detailed earnings information and future estimates, readers can review the earnings and estimates page for DOC.

Disclaimer: This article presents factual information from company reports and analyst estimates for informational purposes only. It does not constitute investment advice or a recommendation to buy or sell any securities. Readers should conduct their own research and consult with a qualified financial advisor before making investment decisions.