Healthpeak Properties

Healthpeak Properties

Healthpeak Properties originated in 1985 as a real estate investment trust focused on healthcare assets, adopting its current name in 2019 after a strategic shift away from senior housing into the higher-growth lab and outpatient medical sectors. Founder and CEO Emeritus Thomas Herzog led that transformation, concentrating the portfolio into what is now three segments: life science, outpatient medical, and a run-off Continuing Care Retirement Community (CCRC) portfolio that the firm has been actively reducing since 2022. The consolidation reflected a view that lab buildings in top innovation clusters and on-campus medical offices adjacent to major hospital systems would produce more durable rent growth than senior living. The REIT's deployment centers on Class A lab buildings in the three dominant life-science markets — South San Francisco, Greater Boston, and San Diego — along with a national outpatient portfolio of roughly 300 medical buildings. Confirmed dispositions and acquisitions in the last three years include the sale of a senior housing portfolio for $4.0 billion in late 2023 and the $5.6 billion merger with Physicians Realty Trust in 2024 (per the firm and public filings). That merger dramatically expanded Healthpeak's outpatient footprint, adding a platform of on-campus medical office buildings tied to health systems like Duke University Medical Center and Baylor Scott & White Health. The combined company derives roughly 55% of its net operating income from lab space and 45% from outpatient medical assets. Scott Brinker became President in 2021 and CEO in 2023, overseeing a team that operates from the firm's Denver headquarters. The CCRC segment — a legacy from an earlier merger — now constitutes less than 5% of income and is classified as a non-core asset held for eventual monetization. In March 2024, Healthpeak completed its merger with Physicians Realty Trust and concurrently joined the S&P 500, a rare index inclusion for a specialized healthcare REIT (per Healthpeak and S&P, 2024). The firm has also deepened its development pipeline in South San Francisco, with one ongoing lab project at 3325-3333 Haven Avenue expected to complete in 2026 — signaling a conviction in the post-pandemic biotech ecosystem despite short-term leasing headwinds. What distinguishes Healthpeak from a generalist REIT is its pure-play concentration in what are effectively mission-critical operating facilities for tenants: pharmaceutical companies, biotechs, and hospital systems cannot easily relocate lab infrastructure or walk away from an on-campus clinic embedded in a regional referral network. The tenant base — including names such as Amgen, Genentech, and HCA Healthcare — generates weighted average lease terms above 7 years and retention rates exceeding 80%. This makes Healthpeak's cash-flow profile closer to a private infrastructure yield strategy than a traditional real estate vehicle, which is precisely the thesis that institutional allocators evaluating healthcare REITs are underwriting.