Healthpeak Properties Navigates Lab Slump With Defensive Growth

Healthpeak Properties, Inc. ((DOC)) has held its Q4 earnings call. Read on for the main highlights of the call.

Healthpeak Properties Balances Lab Headwinds With Senior Housing and Outpatient Strength

Healthpeak Properties’ latest earnings call painted a nuanced picture: the company faces clear near-term earnings pressure from its life science lab portfolio and higher refinancing costs, yet management emphasized robust performance and strategic momentum in outpatient medical and senior housing, backed by solid liquidity and active capital recycling. Overall sentiment leaned cautiously optimistic—acknowledging that 2026 earnings will step down from 2025, but stressing that the portfolio mix, balance sheet and strategic repositioning leave the REIT well placed for a longer-term recovery.

Solid 2025 Financial Performance and Same-Store Growth

Healthpeak reported Q4 FFO as adjusted of $0.47 per share and AFFO of $0.40, with full-year 2025 FFO as adjusted of $1.84 and AFFO of $1.69. Total portfolio same-store cash NOI rose 3.9% in the fourth quarter and 4.0% for the full year, underscoring solid underlying performance despite mounting pressure in the lab segment. These results give the company some cushion going into 2026, even as management prepares investors for a modest earnings step-down driven by segment-specific and capital-structure headwinds.

Outpatient Medical Segment Delivers Record Leasing and Sector-Leading Metrics

Outpatient medical was the standout performer, delivering sector-leading operating results and record leasing. Healthpeak executed 4.9 million square feet of outpatient leasing in 2025, including a company-record 1.0 million square feet of new leases. Cash releasing spreads on renewals came in at 5%, tenant retention reached 79%, and year-end occupancy was a strong 91%. Same-store NOI growth of 3.9% outpaced guidance, signaling robust demand from healthcare tenants and demonstrating the defensive nature of this segment within the portfolio.

Accretive Outpatient Dispositions and Merger Synergies Support Earnings

Management continued to prune the outpatient portfolio by selling fully stabilized, non-core assets at attractive pricing, reinforcing the discipline behind its capital recycling strategy. In the fourth quarter alone, Healthpeak sold $325 million of outpatient properties at roughly a 6% cap rate. The merger with Physicians Realty Trust is delivering tangible benefits, with approximately $70 million of identified synergies supporting earnings and helping to offset pressures from other parts of the business. This combination of value-accretive sales and merger-driven efficiencies positions the outpatient platform as a key earnings anchor.

Senior Housing Shows Strong Growth and a Strategic Path via Janus Living

Senior housing is emerging as a major growth engine. Same-store NOI in the segment grew 12.6% for the full year and 16.7% in Q4, reflecting strong operating momentum and favorable demand trends. Healthpeak plans to contribute its entire senior housing portfolio to a planned Janus Living IPO, where it expects to remain a meaningful shareholder while managing the assets. The company recently closed a $314 million JV partner buyout (representing a 46.5% interest) and intends to contribute an additional $360 million of acquisitions to the Janus Living pipeline. While the IPO introduces execution and market risk, it also provides a clear strategic framework for unlocking value in this high-growth platform.

Life Science Portfolio: Early Leasing Momentum but Depressed Occupancy

The life science (lab) portfolio remains the biggest operational and earnings overhang. In 2025, Healthpeak executed nearly 1.5 million square feet of lab leasing, including 562,000 square feet of new deals, with positive 5% cash releasing spreads on renewals—signs of improving demand. Management also highlighted better capital markets activity for life science since Labor Day 2025, including more active capital raising and M&A, and cited an approximately 1.5 million square foot leasing pipeline plus another 100,000 square feet under LOI post year-end. However, lab occupancy has fallen sharply to around 77%—about 600 basis points lower over the year, and further depressed by the Gateway acquisition—leaving a meaningful earnings drag in the near term.

Balance Sheet Strength, Liquidity and Active Capital Recycling

Despite sector headwinds, Healthpeak’s balance sheet remains in solid shape. Net debt to adjusted EBITDA stands at roughly 5.2x, and the company ended the year with $2.4 billion of liquidity. Year-to-date 2026, Healthpeak has completed $464 million of acquisitions, including the $314 million JV buyout related to senior housing and the Gateway life science acquisition. Management plans more than $1 billion in asset sales, recapitalizations and loan repayments during 2026 and flagged $1.1 billion of upcoming refinancing activity. This combination of liquidity and active portfolio management is central to navigating higher rates and the lab downturn.

Disciplined 2026 Guidance and Segment-Level Expectations

Healthpeak issued 2026 FFO as adjusted guidance of $1.70 to $1.74 per share, with a midpoint of $1.72, below 2025’s $1.84. The company expects total same-store NOI to range from down 1% to up 1%. Within that, outpatient medical is guided to grow 2% to 3%, senior housing a strong 8% to 12%, while lab is expected to decline 5% to 10%. Management detailed the drivers behind each segment: outpatient to benefit from its strong leasing and high occupancy, senior housing from pricing power and operational leverage, and labs from a slow rebuild in demand that will take time to translate into earnings.

Leadership Investments to Support Strategic Platforms

Management underscored its focus on execution by highlighting a series of senior hires aimed at deepening capabilities in key markets and platforms. New additions include Dennis Sullivan for San Diego and Claire Brown for Boston, reinforcing the company’s presence in critical life science and healthcare hubs. Jonathan Hughes joined as SVP of finance and investor relations to support the Janus Living initiative, while Omkar Joshi was appointed head of enterprise innovation. These moves are intended to sharpen Healthpeak’s competitive edge and support the execution of its multi-segment strategy.

Lab Headwinds, Earnings Pressure and Refinancing Risk

The company was candid about the near-term earnings pressure arising from its lab portfolio and funding costs. Lab occupancy losses are estimated to reduce 2026 FFO by roughly $0.12 per share, with management suggesting a hit of about 1 to 1.5 cents per 100 basis points of occupancy decline. Lab same-store NOI is forecast to fall 5% to 10% in 2026. The 2026 FFO guidance midpoint is below 2025 largely due to this lab earnings lag, higher refinancing costs, redevelopment drag and the impact of exercising an 11% cap-rate purchase option in Salt Lake City, which is expected to reduce earnings by roughly one cent. Around $1.1 billion of refinancing is scheduled for 2026, and while management has already locked in some higher-cost funding, it expects to improve the cost of capital as markets allow.

Earnings Timing Lags and Unwinding of One-Off Benefits

Investors should also brace for near-term quarter-to-quarter volatility. Management guided Q1 2026 FFO to be about $0.03 lower than Q4 2025—moving from $0.47 to roughly $0.43—as several one-off fourth quarter benefits roll off, including termination-related receipts and free-rent burn-off. Lower year-end occupancy will also flow through the income statement. In life science, even as leasing and capital markets activity improve, there is an inherent delay between signing deals, completing build-outs and rent commencement, making the timing of an earnings recovery uncertain and highly dependent on the broader funding environment for lab tenants.

Janus Living IPO: Strategic Opportunity With Execution Risk

The planned Janus Living IPO represents a pivotal strategic step for Healthpeak’s senior housing business. By contributing its entire senior housing portfolio while remaining a significant shareholder and manager, Healthpeak aims to highlight the value of this high-growth segment and potentially unlock a separate equity currency. However, management acknowledged that the IPO’s timing and structure remain subject to regulatory and market conditions, and the transaction will dilute Healthpeak’s direct ownership in the assets. Importantly, they do not expect it to meaningfully affect 2026 guidance, suggesting that investors should view the IPO as a medium- to long-term strategic lever rather than a near-term earnings catalyst.

Forward-Looking Guidance: Cautious Near Term, Optionality Longer Term

Looking ahead, Healthpeak’s 2026 outlook is deliberately conservative, with FFO as adjusted guided to $1.70–$1.74 per share and same-store NOI projected to be roughly flat at the portfolio level. The company plans about $500 million of CapEx in 2026, reflecting continued investment in development and repositioning, particularly in labs and senior housing. With $2.4 billion in liquidity and leverage around 5.2x net debt to adjusted EBITDA, the balance sheet provides room to maneuver through $1.1 billion of refinancing and the planned $1 billion-plus of asset sales and capital recycling. Management stressed that while lab earnings will lag an improvement in leasing and capital markets activity, strong outpatient and senior housing performance, combined with the Janus Living strategy and disciplined capital allocation, should leave the company well positioned when the life science cycle turns.

Healthpeak’s earnings call highlighted a portfolio in transition: resilient and growing outpatient and senior housing platforms are increasingly offsetting cyclical weakness in life science labs and the weight of higher interest costs. For investors, 2026 is shaping up as a digestion year, with lower FFO and visible headwinds but also significant strategic progress, solid liquidity and multiple levers for future growth. The company’s ability to execute on leasing in labs, successfully launch Janus Living and manage refinancing costs will be key drivers of sentiment and valuation in the coming quarters.