# Healthpeak Properties (DOC) Financial Model Free Excel 3-statement financial model and company analysis for Healthpeak Properties. - Canonical: https://finamodel.com/companies/healthpeak-properties - Industry: Real Estate - Downloadable model: Yes - Excel download: https://finamodel.com/company-models/DOC.xlsx ## Model Purpose This model projects property-level Net Operating Income, Funds From Operations, and Adjusted Funds From Operations to determine the equity valuation and dividend sustainability for Healthpeak Properties as it navigates life science headwinds and executes its senior housing spin-off. ## Company Overview Healthpeak Properties, Inc. is a fully integrated Real Estate Investment Trust (REIT) that owns, operates, and develops high-quality real estate for healthcare discovery and delivery. The company focuses on three core asset classes: Outpatient Medical (approximately 52% of Adjusted NOI), Lab/Life Science (approximately 37% of Adjusted NOI), and Senior Housing (approximately 11% of Adjusted NOI). The portfolio is heavily concentrated in the United States, with lab properties clustered in major scientific research hubs like South San Francisco, Boston, and San Diego. Healthpeak operates an asset-heavy business model, generating revenue primarily through long-term triple-net and gross leases, as well as resident fees in its operating senior housing joint ventures. The company holds a strong competitive position as one of the largest healthcare REITs in the S&P 500, competing directly with Alexandria Real Estate Equities, Ventas, and Welltower. Recent major events include the transformational $21 billion all-stock merger with Physicians Realty Trust in March 2024, which significantly expanded its outpatient medical footprint, and the planned 2026 initial public offering of Janus Living, a dedicated senior housing vehicle in which Healthpeak will retain a substantial majority interest. ## Revenue Deep Dive ### Outpatient Medical - **Segment name:** Outpatient Medical - **Revenue driver formula:** Rentable Square Feet x Occupancy % x Average Annualised Base Rent per Square Foot - **Historical growth rate:** 2% to 4% Same-Store Cash NOI growth - **Key growth levers and headwinds:** Driven by the structural shift of healthcare delivery to lower-cost outpatient settings, high tenant retention, and steady 2% to 3% annual rent escalators. - **Pricing dynamics:** Contractual lease agreements with fixed annual escalations; highly stable with low tenant default risk. - **Revenue recognition notes:** Recognised on a straight-line basis over the lease term. - **Seasonality:** Minimal seasonality due to long-term lease structures. ### Lab (Life Science) - **Segment name:** Lab - **Revenue driver formula:** Rentable Square Feet x Occupancy % x Average Annualised Base Rent per Square Foot - **Historical growth rate:** Historically 4% to 6%, recently contracting to negative 5% to 10% Same-Store Cash NOI growth - **Key growth levers and headwinds:** Heavily impacted by biotechnology funding cycles, venture capital deployment, and current market oversupply in key hubs like South San Francisco and Boston. - **Pricing dynamics:** Contractual, but currently facing negative mark-to-market pressures and increased tenant credit risk upon renewal. - **Revenue recognition notes:** Straight-line rent with significant tenant improvement amortisation. - **Seasonality:** Not materially seasonal. ### Senior Housing - **Segment name:** Senior Housing - **Revenue driver formula:** Available Units x Occupancy % x Average Monthly Revenue per Occupied Unit (REVPOR) - **Historical growth rate:** 8% to 13% Same-Store Cash NOI growth recently - **Key growth levers and headwinds:** Driven by an ageing demographic and strong pricing power, offset by elevated facility-level labour and operating costs. - **Pricing dynamics:** Spot pricing with annual or semi-annual rate increases; residents pay out-of-pocket (private pay). - **Revenue recognition notes:** Resident fee income is recognised monthly as services are rendered; non-refundable entrance fees are amortised over the expected stay. - **Seasonality:** Slight seasonality with lower occupancy typically observed in the winter months due to flu season mortality rates. ## Cost Structure ### Variable Costs / COGS - **Line-by-line breakdown:** Property operating expenses (utilities, maintenance, property taxes, insurance) and Senior housing operating expenses (labour, food, medical supplies). - **Gross margin range:** Net Operating Income (NOI) margin typically ranges from 65% to 70% on a consolidated basis. - **Key input costs and commodity exposures:** Utility rates, property tax assessments, and nursing staff wages. - **How COGS scales with revenue:** Triple-net leases pass most operating expenses to the tenant, creating high margin stability. Senior housing operating expenses scale linearly with occupancy and are highly sensitive to wage inflation. ### Operating Expenses - **R&D:** Not applicable for this REIT. - **SG&A:** General and administrative expenses typically run at 4% to 5% of total revenue. The 2024 merger generated significant G&A synergies, reducing overhead as a percentage of assets. - **Depreciation & Amortisation:** Represents the largest GAAP expense, typically 35% to 40% of revenue, driven by the massive real estate asset base. - **Stock-Based Compensation:** Minimal relative to revenue, typically under 1%. - **Restructuring / one-time charges:** Frequent in recent years due to the Physicians Realty Trust merger integration and the upcoming Janus Living IPO preparation. ### Margin Profile - **Gross margin:** Property-level NOI margin of 65% to 70%. - **EBITDA margin:** Adjusted EBITDA margin typically ranges from 55% to 60%. - **Margin trend:** Expanding slightly in outpatient medical due to internalised property management, but compressing in the Lab segment due to lower occupancy and higher tenant concessions. - **Segment-level margins:** Outpatient Medical and Lab operate at high NOI margins (70%+), while Senior Housing operates at lower margins (25% to 35%) due to the heavy operational and labour component. ## Balance Sheet Structure - **Total assets:** Approximately $20 billion to $25 billion. - **Key asset categories:** Real estate investments (land, buildings, improvements), construction in progress, and investments in unconsolidated joint ventures. - **Goodwill & intangibles as % of total assets:** Intangible assets (primarily in-place lease value from acquisitions) represent 5% to 10% of assets. - **Working capital profile:** - **Days Sales Outstanding (DSO):** 10 to 15 days (rent is typically paid on the first of the month). - **Days Inventory Outstanding (DIO):** Not applicable. - **Days Payable Outstanding (DPO):** 30 to 45 days. - **Net working capital as % of revenue:** Structurally negative, which is standard for REITs. - **Is working capital positive or negative?** Negative, as deferred revenue (prepaid rent) and accrued liabilities exceed liquid receivables. - **PP&E:** Real estate is the core asset. Buildings are typically depreciated over 35 to 40 years, while tenant improvements are depreciated over the shorter of the lease term or useful life. - **Right-of-use assets / operating leases:** Immaterial relative to the owned real estate portfolio. ## Capital Expenditure & Investment - **Capex as % of revenue:** 15% to 25%, highly dependent on the development pipeline. - **Maintenance capex vs. growth capex:** Maintenance capex (recurring tenant improvements, leasing commissions, and building upgrades) is roughly 5% to 8% of revenue. Growth capex (new developments and major redevelopments) makes up the remainder. - **Major capex programmes underway:** Significant lab development projects in South San Francisco and Boston, though new starts have been paused due to market oversupply. - **Capitalised software / development costs:** Immaterial. - **M&A pattern:** Transformational acquirer (Physicians Realty Trust merger in 2024) combined with active capital recycling (selling non-core assets to fund developments). - **Typical acquisition multiple paid:** Historically 5.5% to 6.5% capitalisation rates for outpatient medical assets. ## Debt & Capital Structure - **Total debt:** Approximately $7 billion to $8 billion. - **Debt/EBITDA ratio:** Currently 5.2x Net Debt to Adjusted EBITDA, with a target range of 5.0x to 5.5x. - **Credit rating:** Baa1 (Moody's) and BBB+ (S&P Global). - **Key debt instruments:** Unsecured term loans (including a $750 million facility added in 2024), senior unsecured bonds, and a commercial paper programme. - **Maturity profile:** Well-laddered, with average maturity typically exceeding 5 years. - **Interest rate profile:** Predominantly fixed-rate debt (often via interest rate swaps), with a weighted average interest rate around 4.0% to 4.5%. - **Covenants:** Standard REIT covenants including maximum total leverage (typically 60%), minimum fixed charge coverage (typically 1.5x), and maximum unsecured debt ratios. - **Share repurchase programme:** Active; the company repurchased over 5 million shares in 2025 to capitalise on the disconnect between the stock price and net asset value. - **Dividend policy:** The company pays a monthly dividend of $0.10167 per share ($1.22 annualised), representing an AFFO payout ratio of approximately 70% to 75%. ## Cash Flow Characteristics - **Operating cash flow conversion:** OCF consistently exceeds Net Income due to massive non-cash depreciation charges. - **Free cash flow margin:** AFFO margin (a proxy for REIT free cash flow) is typically 45% to 50% of revenue. - **Major non-cash items:** Real estate depreciation, amortisation of in-place leases, straight-line rent adjustments, and stock-based compensation. - **Working capital cash flow impact:** Minimal impact year-over-year; growth is funded via debt and equity issuance, not working capital. - **Capex intensity:** High. Recurring capex reduces FFO to AFFO, while development capex requires external financing. - **Cash tax rate vs. GAAP effective tax rate:** Near zero. As a REIT, Healthpeak pays no federal income tax on earnings distributed to shareholders, provided it distributes at least 90% of its taxable income. ## Sheet Structure 1. **Assumptions:** Hardcoded drivers for macroeconomic inputs, segment-level Same-Store NOI growth, occupancy, and capitalisation rates. 2. **Property Portfolio:** Roll-forward of square footage, unit counts, and occupancy by segment (Outpatient Medical, Lab, Senior Housing). 3. **Revenue Build:** Calculation of rental income, resident fees, and straight-line rent adjustments by segment. 4. **Property Expenses:** Calculation of property-level operating expenses and calculation of segment-level Adjusted NOI. 5. **Income Statement:** Consolidated GAAP income statement from total revenue down to Net Income. 6. **FFO & AFFO Reconciliation:** Critical REIT sheet bridging Net Income to Nareit FFO, FFO as Adjusted, and AFFO. 7. **Balance Sheet:** Assets, liabilities, and equity, featuring a detailed real estate gross and net book value schedule. 8. **Debt Schedule:** Tranche-by-tranche debt build, interest expense calculation, and fixed/floating mix. 9. **Cash Flow Statement:** GAAP cash flow statement (Operating, Investing, Financing). 10. **Capex & Development:** Schedule of maintenance capex, tenant improvements, leasing commissions, and development spend. 11. **Valuation:** Net Asset Value (NAV) build applying segment-specific cap rates to forward NOI, plus a Dividend Discount Model. ## Key Financial Relationships 1. **Outpatient Medical Revenue** = Outpatient Medical Rentable Sq Ft x Occupancy % x Outpatient Medical RevPOR 2. **Lab Revenue** = Lab Rentable Sq Ft x Occupancy % x Lab RevPOR 3. **Senior Housing Revenue** = Senior Housing Units x Occupancy % x Senior Housing RevPOR 4. **Segment Adjusted NOI** = Segment Revenue - Segment Property Operating Expenses 5. **Total Adjusted NOI** = Outpatient Medical NOI + Lab NOI + Senior Housing NOI + Other NOI 6. **Nareit FFO** = Net Income + Real Estate Depreciation and Amortisation - Gains on Sales of Real Estate + Impairments of Real Estate 7. **FFO as Adjusted** = Nareit FFO + Merger and Integration Costs + Severance and Restructuring Charges 8. **AFFO** = FFO as Adjusted - Straight-Line Rent Adjustments - Recurring Capital Expenditures - Tenant Improvements - Leasing Commissions 9. **Net Debt** = Total Short-Term Debt + Total Long-Term Debt - Cash and Cash Equivalents 10. **Net Debt to Adjusted EBITDA** = Net Debt / Annualised Adjusted EBITDA 11. **AFFO Payout Ratio** = Annualised Dividend per Share / AFFO per Share 12. **Implied Cap Rate** = Total Adjusted NOI / (Market Capitalisation + Net Debt + Preferred Equity) ## Cross-Sheet Dependencies - The **Property Portfolio** sheet feeds the square footage and occupancy metrics into the **Revenue Build**. - The **Revenue Build** and **Property Expenses** sheets feed directly into the **Income Statement** and the **FFO & AFFO Reconciliation**. - The **Capex & Development** sheet feeds gross real estate additions on the **Balance Sheet**, depreciation on the **Income Statement**, and recurring capex deductions on the **FFO & AFFO Reconciliation**. - The **Debt Schedule** calculates interest expense, which feeds the **Income Statement** and impacts Net Income, thereby creating a potential circularity if debt is used to plug cash shortfalls on the **Cash Flow Statement**. - The **FFO & AFFO Reconciliation** feeds the **Valuation** sheet to determine dividend sustainability and cash flow yields. ## Sign Convention - Revenues, assets, and cash inflows are represented as positive numbers. - Expenses, liabilities, capital expenditures, and cash outflows are represented as negative numbers. - In the FFO/AFFO reconciliation, add-backs (like depreciation) should be positive, while deductions (like recurring capex and straight-line rent) should be negative. - Margins and growth rates are displayed as positive percentages unless indicating a decline. ## Things Most Likely to Go Wrong - **Merger Accounting Distortion:** The 2024 merger with Physicians Realty Trust significantly increased the asset base and share count. Historical data prior to Q2 2024 is not directly comparable to current run-rates. - **Janus Living Consolidation:** The planned 2026 IPO of the Janus Living senior housing portfolio will change the reporting structure. The model must account for minority interest deductions if Healthpeak retains a majority stake but spins off a portion of the equity. - **Straight-Line Rent Volatility:** GAAP revenue includes non-cash straight-line rent, which must be carefully stripped out to calculate AFFO. Failing to deduct this will artificially inflate cash flow metrics. - **Lab Segment Headwinds:** The Lab segment is experiencing negative same-store NOI growth (-5% to -10% projected for 2026). Applying historical positive growth rates to this segment will severely overstate future earnings. - **Capitalised Interest:** Healthpeak capitalises interest on its development projects. This lowers GAAP interest expense but must be monitored as projects are placed into service and interest begins hitting the income statement. - **Tenant Improvement Amortisation:** Lab and medical office leases require heavy upfront tenant improvements. These are capitalised and amortised, creating a drag on AFFO that is often missed if only looking at GAAP earnings. - **Share Count Fluctuations:** The company actively issues equity via its ATM programme and repurchases shares. The denominator for per-share metrics must be dynamically linked to the financing assumptions. - **Joint Venture Income:** Healthpeak has unconsolidated joint ventures. The equity income from these JVs must be included in FFO, but the cash distributions are what matter for AFFO. ## Validation Checks - **Dividend Coverage:** AFFO per share must be strictly greater than the $1.22 annualised dividend per share. Flag if the payout ratio exceeds 85%. - **Leverage Ratio:** Net Debt to Adjusted EBITDA should remain between 5.0x and 5.5x. Flag if it exceeds 6.0x, which could threaten the BBB+/Baa1 credit rating. - **Balance Sheet Check:** Total Assets must exactly equal Total Liabilities plus Shareholders' Equity in every projected period. - **NOI Margin Check:** Consolidated Adjusted NOI margin should remain between 65% and 70%. - **Lab Growth Check:** Lab Same-Store NOI growth must be negative in 2026 based on management guidance. Flag if the model projects positive growth in the near term. - **G&A Ratio:** G&A expense should not exceed 5% of total revenues, reflecting the post-merger synergy run-rate. - **Reconciliation Check:** Net Income plus real estate depreciation must roughly equal Nareit FFO (excluding minor asset sale gains). ## Key Assumptions (Default Values) | Assumption | Default Value | Unit | Rationale | |---|---|---|---| | Outpatient Medical SSNOI Growth | 2.5 | % | Midpoint of management's 2026 guidance (2% to 3%) [1] | | Lab SSNOI Growth | -7.5 | % | Midpoint of management's 2026 guidance (-5% to -10%) due to oversupply [1] | | Senior Housing SSNOI Growth | 10.0 | % | Midpoint of management's 2026 guidance (8% to 12%) [1] | | Consolidated NOI Margin | 67.5 | % | Historical average reflecting high-margin medical/lab offset by lower-margin senior housing | | G&A as % of Revenue | 4.5 | % | Post-merger run-rate reflecting $70M+ in realised synergies [2] | | Effective Interest Rate | 4.5 | % | Weighted average cost of debt based on recent $750M term loan pricing [3] | | Target Net Debt / EBITDA | 5.2 | x | Actual reported leverage at year-end 2025 [1] | | Annualised Dividend per Share | 1.22 | $ | Declared monthly dividend of $0.10167 annualised [4] | | Outpatient Medical Cap Rate | 6.25 | % | Blended cap rate based on recent non-core asset dispositions [4] | | Lab Cap Rate | 7.50 | % | Higher cap rate reflecting current life science market risk and oversupply | | Senior Housing Cap Rate | 6.50 | % | Standard valuation metric for high-quality RIDEA portfolios | | Maintenance Capex as % of NOI | 12.0 | % | Historical average for tenant improvements and leasing commissions | | Effective Tax Rate | 0.0 | % | REIT structure eliminates corporate tax on distributed earnings | ## Data Sources & Benchmarks - **SEC Filings:** Healthpeak Properties (DOC) 10-K, 10-Q, and 8-K filings available on the SEC EDGAR database and the company's investor relations website (ir.healthpeak.com). - **Key Peers:** Alexandria Real Estate Equities (ARE) for the Lab segment, Healthcare Realty Trust (HR) for Outpatient Medical, and Ventas (VTR) / Welltower (WELL) for Senior Housing. - **Industry Data:** Green Street Advisors for healthcare real estate cap rates and NAV premiums/discounts. - **Consensus Estimates:** Bloomberg or FactSet for consensus FFO and AFFO estimates to validate model outputs. - **Proprietary Data:** NIC MAP Vision for senior housing occupancy and rent growth benchmarks across major metropolitan statistical areas. ## Sources - [1] Healthpeak Properties Q4 2025 Earnings Release and 2026 Guidance (Investing.com, February 2026) - [2] Healthpeak Properties 2025 Annual Report / 10-K (SEC.gov, February 2026) - [3] Healthpeak Properties Merger Close Announcement (Healthpeak.com, March 2024) - [4] Healthpeak Properties Q3 2025 Earnings Release and Dividend Declaration (Nasdaq.com, October 2025) --- ## Frequently asked questions ### What kind of properties does Healthpeak Properties own? Healthpeak Properties is a Real Estate Investment Trust (REIT) that owns, operates, and develops high-quality real estate for healthcare discovery and delivery. The company focuses on Outpatient Medical, Lab/Life Science, and Senior Housing assets, primarily located in the United States. ### How does Healthpeak Properties generate revenue? Healthpeak Properties generates revenue primarily through long-term triple-net and gross leases across its portfolio. Additionally, the company earns resident fees from its operating senior housing joint ventures. ### What is Healthpeak Properties' assumed capital expenditure as a percentage of revenue in the financial model? In the financial model, Healthpeak Properties' capital expenditure (Capex) is assumed to be 40% of revenue. This figure accounts for both maintenance capex, such as recurring tenant improvements, and growth capex for new developments. ### What are the key revenue growth and operating margin assumptions in the Healthpeak Properties financial model? The financial model assumes Healthpeak Properties' revenue growth at 20%. Key operating margin assumptions include Cost of Goods Sold (COGS) at 95% of revenue and Selling, General & Administrative (SGA) expenses at approximately 30.23% of revenue. ### What is the purpose of the Healthpeak Properties financial model? The Healthpeak Properties financial model projects property-level Net Operating Income, Funds From Operations, and Adjusted Funds From Operations. Its primary purpose is to determine the equity valuation and assess the dividend sustainability for the company. ### Can I download an Excel financial model for Healthpeak Properties (DOC)? Yes, an Excel financial model for Healthpeak Properties (DOC) is available for download. This model forecasts financial performance from FY2026 through FY2030, incorporating key assumptions for revenue growth, margins, and capital expenditures. [Interactive forecast calculator](https://finamodel.com/companies/healthpeak-properties/forecast)