Healthpeak Reports Strong Same-Store Net Operating Income Growth From Life Science Portfolio in Q4

Healthpeak's fourth-quarter results were relatively in line with our expectations, leading us to reaffirm our $36 fair value estimate for the no-moat company. The life science portfolio once again saw the highest same-store net operating income growth, reporting 5.4% growth in the fourth quarter, slightly below our estimate of 6.2%. Medical office also continued to do well with 3.6% growth, slightly ahead of our 3.1% estimate. However, the continuing care retirement community segment saw another decline in the fourth quarter, down either 9.6% if government grants received from the CARES Act are included in 2020 results or down 0.2% if those grants are excluded. However, since this segment accounts for only 11.8% of Healthpeak’s total NOI, total company NOI excluding the impact of the grants grew 4.0% in the fourth quarter, slightly ahead of our estimate of 3.7%. As a result, Healthpeak reported adjusted funds from operations of $0.41 per share for the fourth quarter, in line with our estimate.