uploads/2018/02/EPS-7.png

HCP’s Portfolio Riding on Developments, Acquisitions, and More

By

Updated

Development

In 2017, HCP invested $200.0 million of development in a life science project in South San Francisco. The initial delivery is expected to be in 2019.

In December 2017, the company entered into a participating debt financing arrangement for the construction of 620 Terry, a $147.0 million senior living complex. This complex is expected to have 243 units and is located in downtown Seattle. This project is also expected to be completed by 2019 and is expected to offer a mix of independent living, assisted living, and memory care units.

Article continues below advertisement

Acquisitions

In 4Q17, HCP announced $424.0 million of acquisitions, reaching a year-to-date total of $562.0 million. 

In November, HCP acquired a 90-unit senior housing facility for $45.0 million. In December, the company closed a $228.0 million acquisition in Boston. This acquisition gave HCP an opportunity to enter the Boston life science market. This acquisition complements the companies’ South San Francisco and San Diego life science portfolios.

In December 2017, HCP acquired 11 off-campus medical office buildings worth $151.0 million. This is a 378,000-square-foot portfolio and is 97.0% occupied.

Debt investment

In 4Q17, HCP recorded an $84.0 million impairment on the debt investment and reduced the value to $105.0 million. The company actively looks for strategic alternatives from selling the loan position to foreclosing the collateral.

The average amount invested in acquisitions by HCP since 2012 is $172.0 million. For its peers, the average amounts follow:

  • Healthcare Trust of America (HTA): $807.0 million
  • Ventas (VTR): $65.0 million
  • Welltower (HCN): $306.0 million

Investors looking for exposure to the healthcare real estate sector can invest in REIT ETFs. HCP holds ~1.2% in the Vanguard REIT ETF (VNQ).

Advertisement

More From Market Realist