Analysis DOC
Healthpeak's lab occupancy gains leave out two new buildings
Including the San Diego purchases changes the comparison with June. The landlord is buying vacant space with plans to earn more as it finds tenants.
Healthpeak's reported lab occupancy reached 79.8% at September 30, up from 78.5% in June. Two buildings acquired on the final day of the quarter are outside that figure.
Including those San Diego properties puts occupancy at 78.8%, according to a footnote in the company's financial supplement. The newly acquired HQ Point campus is only 29% occupied.
A wider portfolio changes the comparison
Research by Ticker Byline shows that the wider September figure sits 0.3 percentage point above June's published level, compared with the reported increase of 1.3 points.
The September-to-June comparisons cover changing sets of properties. Healthpeak also weights occupancy for its ownership stakes, so adding buildings with substantial vacancy changes the average.
| Lab occupancy measure | Rate |
|---|---|
| June 30, published | 78.5% |
| September 30, reported | 79.8% |
| September 30, including the two new buildings | 78.8% |
Leasing in the existing portfolio improved. Healthpeak signed 480,000 square feet of new and renewed lab leases during Q3, up from 381,000 in Q2. Comparable lab property income after operating costs, on its adjusted cash measure, still fell 0.7% from a year earlier.
The vacancy is part of the investment plan
Healthpeak took over HQ Point through a transaction involving its construction loan and remaining equity interest, with a combined value of approximately $105 million.
It is also under contract for a $92 million building in South San Francisco and a $36 million purchase of the remaining 51% interest in a Cambridge building. Those purchases are expected to close in Q4 or early 2027.
The combined $233 million package is 41% occupied. Healthpeak puts the current cash yield at about 5% and expects a stabilized yield of 9% to 10%. It sees opportunities to lease the space using its existing campuses and local relationships.
Senior housing supplies the stronger growth
Elsewhere, comparable senior housing property income rose 25.9%, while outpatient medical properties grew 3.1%. Healthpeak owns 69% of Janus Living, the separately listed senior housing business it consolidates in its accounts.
Healthpeak raised its annual adjusted funds-from-operations forecast to $1.76 to $1.78 a share from $1.73 to $1.77. That property earnings measure adds back real estate depreciation and removes selected other items. Q3 adjusted FFO was $0.44 a share, below last year's $0.46.
The Healthpeak company profile tracks the occupancy definitions, completed and pending acquisitions, financial results and updated expectations.