Aided by growth in revenues,
) - a healthcare real estate investment trust (REIT) - reported
first quarter 2014 adjusted FFO (funds from operations) per share
of 75 cents, a penny ahead of both the Zacks Consensus Estimate
as well as the year-ago quarter figure.
Total revenue came in at nearly $530.0 million during the
quarter, reflecting an increase of 3.7% from the year-ago period.
Total revenue also exceeded the Zacks Consensus Estimate of $513
million. The company's adjusted same-property cash net operating
income (NOI) reached $399.7 million, depicting growth of 4.2%
year over year.
Notable Portfolio Activity
During the reported quarter, HCP invested $32 million for a
medical office building (MOB), bought an 85% stake in a $51
million senior housing community development project as well as
financed 53 million for construction and other capital projects.
On the other hand, the company sold 2 skilled nursing facilities
for $22 million and a hospital for $17 million.
Notably, through May 2014, the company accomplished $162 million
of additional investment deals and executed new leases
aggregating 187,000 square feet of space, including a number of
life science and medical office leases.
At the end of the quarter, HCP had cash and cash equivalents of
$49.7 million, as against $300.6 million at the prior-year end.
During the quarter, the company raised $350 million of 4.2%
senior unsecured notes due 2024. Moreover, it amended its
revolving credit facility and increased its capacity to $2
billion (from $1.5 billion) as well as improved pricing and
extended its term.
CCRC JV and Lease Amendment with Brookdale
Brookdale Senior Living Inc.
) and HCP extended their ties through the creation of a $1.2
billion continuing care retirement communities (CCRC) Joint
Venture. HCP and Brookdale will own 49% and 51%, respectively, of
Moreover, the companies have decided to amend leases on 202
HCP-owned senior housing communities. These communities are
presently operated by
). The closures of the deals are subject to accomplishment of the
pending merger between Brookdale and Emeritus.
HCP expects FFO to range between $2.96 and $3.02 per share for
full-year 2014. The Zacks Consensus Estimate of $3.02 per share
for full-year 2014 matches the top end of the company's guided
range. The estimates exclude the impact of any future
acquisitions or the disclosed CCRC JV and lease amendment with
Recently, HCP announced a quarterly cash dividend of 54.5 cents
per share. The dividend will be paid on May 27, 2014 to
stockholders of record on May 12.
Improving fundamentals in the healthcare REIT market, a
well-balanced, diversified portfolio, opportunistic acquisitions
and strategic tie ups place HCP on the growth trajectory.
However, cut-throat competition remains a challenge for this
Zacks Rank #3 (Hold) stock.
We now look forward to the results of other REIT -
Health Care REIT, Inc.
) - which is scheduled to report on May 8, before the closing
FFO, a widely used metric to gauge the performance of REITs,
is obtained after adding depreciation and amortization and other
non-cash expenses to net income.
BROOKDALE SENR (BKD): Free Stock Analysis
EMERITUS CORP (ESC): Free Stock Analysis
HEALTH CR REIT (HCN): Free Stock Analysis
HCP INC (HCP): Free Stock Analysis Report
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