Analyst Note
| Kevin Brown |We are reaffirming our $33.50 fair value estimate for no-moat Healthpeak after the company reported second-quarter results that were mostly in line with our expectations. Life science produced another strong quarter, with same-store net operating income up 7.4%, slightly ahead of our 5.9% estimate. The medical office segment had its best quarter in over two years, increasing same-store NOI by 4.1%, slightly ahead of our 3.8% estimate. However, the continuing care retirement community segment saw either a 23.2% decline if government grants provided under the Cares Act in 2020 are included in the comparison or 22.7% growth if those grants are excluded. Similarly, the total company same-store NOI figure is either 1.2% if the 2020 grants are included or 7.6% if they are removed from the calculation. Healthpeak reported adjusted funds from operations of $0.40 in the second quarter, which is in line with our $0.40 estimate for the quarter, the $0.40 the company produced in the first quarter of 2021, and the $0.40 the company reported in the second quarter of 2020.