Healthpeak Properties NYSE: DOC reported second-quarter adjusted funds from operations of $0.46 per share and raised its full-year adjusted FFO guidance by $0.02 to a range of $1.73 to $1.77 per share, citing improved same-store net operating income expectations in its lab and senior housing businesses.
Chief Executive Officer Scott Brinker said the company’s strategy during the life science downturn—including a $5 billion merger, a $1 billion IPO and additions to its operating platform—has positioned Healthpeak to benefit as sector fundamentals improve. He said the company has also internalized property management in much of its portfolio and is rolling out an agentic operating platform.
“As the life science pendulum finally starts to swing back in our favor,” Brinker said, the company is stronger and has additional capabilities to pursue growth.
Outpatient medical leasing and Brookfield partnership
Healthpeak reported continued strength in its outpatient medical portfolio. During the second quarter, the company executed 1.2 million square feet of leases, including about 327,000 square feet of new leasing, bringing year-to-date leasing volume to 2.3 million square feet. Tenant retention was 80%, while cash re-leasing spreads were 5%.
Total outpatient medical occupancy increased 20 basis points sequentially to 90.7%. Since July 1, Healthpeak has executed another 204,000 square feet of leases and has about 882,000 square feet under letters of intent, according to Chief Financial Officer Kelvin Moses.
The company also announced another development agreement with Northside in Atlanta for a new outpatient medical project. It will be the fifth project Healthpeak has undertaken with Northside, with the projects totaling approximately 565,000 square feet.
Healthpeak completed an outpatient medical recapitalization with Brookfield, retaining a 51% interest in a 5.6 million-square-foot portfolio while raising $1 billion in cash proceeds. Moses said the transaction represented a trailing cash capitalization rate of 5.9%.
After seven years, Healthpeak will have a limited number of rights to repurchase Brookfield’s noncontrolling interest at a price designed to provide Brookfield with a 6.5% unlevered return. Healthpeak will continue to provide asset management, property management and leasing services for the portfolio.
Brinker said the Brookfield partnership and a separate arrangement with Blackstone expand the company’s alternative sources of equity capital. Healthpeak holds a 20% interest in its Blackstone venture, compared with 51% in the Brookfield venture. Brinker said he expects Healthpeak to pursue further opportunities with both partners.
Lab occupancy rises as leasing activity continues
Healthpeak’s lab portfolio executed 381,000 square feet of leases during the quarter, with about 60% representing new leasing and 30% involving vacant space. Total occupancy increased 80 basis points sequentially to 78.5%, up 140 basis points from year-end 2025.
Since July, the company has entered leases for about 20,000 square feet and has another 480,000 square feet under letters of intent. Moses said Healthpeak expects a modest improvement in total lab occupancy by year-end from its June 30 level, as anticipated commencements in the second half exceed expirations.
Management emphasized that it is focused on total occupancy and total NOI rather than the timing of same-store NOI turning positive. Brinker said higher total occupancy is the key driver of earnings growth in the segment.
Healthpeak cited particular progress in the Torrey Pines lab submarket in San Diego. Including executed leases and letters of intent, the company’s leased percentage in the submarket has risen to 97% from approximately 65% at the end of 2025.
Moses said demand has been strongest in the Bay Area and San Diego, while Boston remains the company’s most challenged market because of supply. In Boston’s Route 128 West market, Brinker said overall vacancy is about 30%, while Healthpeak’s assets are 11% vacant.
Chief Development Officer and Head of Lab Scott Bohn said tenant demand has been more concentrated in the 25,000- to 75,000-square-foot range. Moses said lease rates have generally remained in line with portfolio averages, while free rent has typically ranged from one to two months per lease year, depending on the property and required investment.
Brinker said Healthpeak is evaluating lab acquisition opportunities in core markets where it has local operating capabilities. He said the company expects most potential investments to be fee-simple acquisitions, though it may consider loan structures with paths to ownership in select situations.
Capital allocation, senior housing and balance sheet
Healthpeak ended the second quarter with net debt to adjusted EBITDA of 4.7 times and $4.1 billion of available liquidity. Moses said the company expects to generate $1.9 billion of gross proceeds from capital recycling initiatives through year-end.
Through Aug. 4, Healthpeak had repaid $900 million of debt, including $650 million of senior unsecured notes in July. The company also completed $1 billion of acquisitions and buybacks. Brinker said Healthpeak repurchased $100 million of stock in April when shares traded below $17 and the company saw an FFO yield above 10%.
In senior housing, Healthpeak said its ownership interest in Janus Living reached 74%, representing approximately $6.5 billion of equity value. Janus Living posted 45% total revenue growth and 34% adjusted EBITDA growth in the second quarter, while ending the period with cash on its balance sheet and no debt.
Brinker said Janus Living’s same-store portfolio delivered 260 basis points of occupancy growth and 19% NOI growth. Healthpeak has closed $1.8 billion of senior housing acquisitions since Jan. 1 and expects its senior housing portfolio to nearly double in size this year.
About Healthpeak Properties (NYSE:DOC)
Healthpeak Properties, Inc is a real estate investment trust (REIT) specializing in healthcare-related real estate. Headquartered in Irvine, California, the company owns, develops and acquires a diversified portfolio of properties that cater to the evolving needs of the healthcare industry. Its investments span life science research facilities, medical office buildings and senior housing communities, positioning Healthpeak as a key provider of specialized real estate assets.
Within its life science segment, Healthpeak develops and leases laboratory and research space to biotechnology, pharmaceutical and other life science companies.
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