Healthpeak Properties Inc

Bull points

• Contributing to that sequential change, utilities was a large contributor, kind of quarter over quarter, and actually a decrease in holding that relatively flat. And same with general maintenance category there. Year over year, those two categories were up. about $700,000 and $600,000, but quarter over quarter, we did a great job with our asset management team to keep those flat. I think we're also seeing the results of some of our ESG efforts in the utility expense from LED upgrades, things like that, where we've made wise capital investments, and we're starting to see that reduction in the operating expenses from some of those projects that we completed this year.
• Actually, the long-term return profile there is much better than about anything else we do. It's just taking time. It's a very strategic location. For some reason, 20 years ago, 25 years ago, physicians and hospitals thought condo projects were the right way to build buildings and invest in buildings. In this particular case, a condo was built in an incredibly strategic location across the street from three health systems. We're really excited about the long term. It may be the best IRR cash yield we'll ever get from individual investments. It just takes time to accumulate the condos over time. Great question. We know it looks odd, but at the same time, on the back end, we're going to have fantastic returns from those investments. On the development, that's a good question. It takes 18 months to build these buildings. The ones under construction are about to begin construction. It just plays out over time, the 18-month construction cycle. Of that 200 million, for your model, average it out over 18 months, but it's something like that. Frankly, that's the projects we know we will probably finance this year or contractually commit to financing this year. And we're working on others. So I think there's, I think the opportunity is, you know, for kind of outsized investment on the development side.
• excited about 2023. It's a, you know, it's a different market and at a different time, but, uh, we think a 20 year bull run and seller's market has turned into a, you know, outsized opportunity for doc, uh, positions royalty trust this year.

Bear points

• Our insurance in the quarter was up $1.2 million over the prior year. And again, those were some one-time costs in the quarter. But one of the things we really appreciate about our portfolio, as Jeff was alluding to, is that we're 95% occupied and highly triple net leased. So our operating expense recoveries were actually up 10.3% to offset that increase.
• MOB same-store NOI growth was 1.5% in the fourth quarter, below our historical 2% to 3% growth rate due to the 30 basis point decline in occupancy from the vacancies we discussed last quarter.
• This is our 19th consecutive quarter of positive same-store NOI cash growth. Again, we enter 2023 with strong leasing momentum.