Healthpeak Properties, Inc.

Good morning and welcome to the HealthPeak Properties, Inc. Third Quarter 2020 Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask a question. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Barbette Rogers, Senior Director, Investor Relations.

Please go ahead. Thank you and welcome to HealthPeaks Third Quarter Financial Results Conference Call. Today's conference call will contain certain forward-looking statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, our forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our expectations. A discussion of risk and risk factors is included in our press release and detailed in our filings with the SEC. We do not undertake a duty to update any forward-looking statements. Certain non-GAAP financial measures will be discussed on this call. In an exhibit of the 8K we furnished with the SEC yesterday, we have reconciled all non-GAAP financial measures to the most directly comparable GAAP measure in accordance with Reg G requirements. The exhibit is also available on our website at www.healthpeak.com. I will now turn the call over to our Chief Executive Officer, Tom Herzog.

Thank you, Barbette, and good morning, everyone. On the call with me today are Scott Brinker, our President and CIO, and Pete Scott, our CFO. Also on the line and available for the Q&A portion of the call are Tom Clerch, our Chief Development and Operating Officer, and Troy McHenry, our Chief Legal Officer and General Counsel. Starting with our Q3 results, Three-quarters of our business, represented primarily by life science and MOBs, is performing on track or ahead of our pre-COVID expectations. We are seeing leasing executions in life science and MOBs that are in line with or ahead of our original annual plan, and we have increased our same-store outlook in both segments. In life science, our development activity remains on track with very strong pre-leasing. The industry continues to set records in VC funding, IPOs, and secondary equity offerings, which is adding to the already strong demand for space. In a medical office, we're on track with our development program with HCA and have or expect to deliver four development projects this year. The other one quarter of our business, represented by SHOP, TripleNet, and CCRCs, continues to experience pressure from occupancy and expense trends related to COVID, partially offset by CARES Act stimulus. However, our results have been quite favorable relative to the outlook framework we provided last quarter. Improvements to PPE, testing, staffing, quarantines, and other protocols have allowed our senior housing operators to better contain outbreaks of the virus and to function more effectively and profitably. And as we look forward, we are encouraged that healthcare workers and seniors are prioritized to receive a vaccine when available in phases 1A and 1B. Over the past four years, we have taken deliberate actions to exit non-core senior housing and SNF assets while reinvesting the proceeds in our growing life science, MOBs, and CCRC businesses, each of which consists of irreplaceable and high barrier to entry portfolios, and each with significant embedded upside. In our life science business, we have critical mass and a strong competitive position in each of the three major hotbeds of innovation, South San Francisco, Boston, and San Diego. In the Boston life science market during the past three years, we have built a 2.4 million square foot portfolio inclusive of our latest acquisition and development announcements, with Boston now being roughly equivalent in size to our San Diego life science portfolio. We have grown and strengthened our medical office business with a renewed focus on new developments of HCA and other top hospitals. Including our acquisitions and development completions announced last night, we have added almost 800,000 square feet of on-campus medical office space year to date. And earlier this year, we increased our ownership interest in our CCRC portfolio to 100% and transitioned operations to LCS, who is, in our view, the top operator in this important segment of senior housing. We currently have a $1.2 billion active development pipeline that is fully funded in our plan and 63% pre-leased. Additionally, we have an enormous shadow pipeline of development and densification opportunities and our life science, MOBs, and CCRC businesses with significant value creation potential over the next 10 to 15 years. And our company remains in great financial shape with strong liquidity and a fortress balance sheet, which we continue to manage carefully. And finally, during 2020, we continue to invest heavily in people and systems and have built what we believe is one of the top platforms in our industry. As to the status of our shop and triple net portfolio transactions. First over the last four years, we have dramatically reduced the size of both our shop and triple net portfolios with aggregate sales of over $5 billion. As I noted during our last quarterly earnings call and on a recent webcast at industry conference presentation, there's been strong interest in our shop and triple net portfolios from a number of potential buyers that have considerable dry powder. These buyers include PE firms whose investment time horizon fits well to capture the future recovery and potential upside of the senior housing market. Importantly, we believe there could be an opportunity to accelerate the exit of our shop and triple net portfolios, which we now consider non-core. We're in various stages on a number of transactions representing the majority of our roughly $4.5 billion, plus or minus, of shop and triple net assets. which Scott will discuss further in a few minutes. We believe senior housing will remain a vital asset class in our society and will continue to serve the demand of the rapidly growing baby boomer demographic. So we will be a seller at the right price, but we are also fully prepared to play through and sell these assets over time if needed. Regardless, our focus going forward will be on growing in our three core businesses of life science, MOBs, and CCRCs. Moving on to our dividend. Our year-to-date dividend currently exceeds our AFFO by one penny, employing a year-to-date payout ratio of 101%. As we mentioned on prior calls, we are comfortable if our dividend modestly exceeds our AFFO for a short period of time, and we'll continue to assess our dividend based on our earnings results, the path of the virus, and the outcomes of our various potential transactions. Last night, we announced we are relocating our corporate headquarters to Denver, and we'll be moving 20 to 25 people from Irvine to Denver during 2021. We chose Denver as it provides a centralized location relative to our nationwide portfolio, equal travel time to our two offices in Irvine and Asheville, which will continue to house the majority of our talented employee base. and quicker travel when meeting with our analysts, investors, and rating agencies around the country. Denver also provided a favorable location to attract and retain top talent. And finally, we also announced that we were replacing our age 75 mandatory director retirement policy with a 15-year term limit. Given the current makeup of our board, we believe the new policy will provide a more orderly and consistent board refreshment over time and will maintain a favorable mix of experience and diversity. And frankly, I could not be happier with the breadth and depth of our current board. With that, I'll turn it over to Pete to discuss our financial results. Pete? Thanks, Tom.