Healthpeak Properties, Inc.

Good morning and welcome to the HealthPeak Properties, Inc. first quarter conference call. All participants will be in a listen-only mode. Should you need assistance, please sign up a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone 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 Andrew Jones, Senior Vice President, Investors Relations. Please go ahead.

Welcome to HealthPeaks' first quarter 2023 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 filing to the SEC. We do not undertake a duty to update any more of those statements. Certain non-GAAP financial measures will be discussed on this call. In an exhibit to the AK we furnished to the SEC yesterday, we have reconciled all non-GAAP financial measures to the most directly comparable GAAP measures in accordance with the right to your requirements. The exhibit is also available on our website at healthpeak.com. I'll now turn the call over to our President and Chief Executive Officer, Scott Brinker.

Thanks, Andrew. Good morning and welcome to HealthPeak's first quarter earnings call. Joining me today for prepared remarks are Pete Scott, our CFO, and Scott Bone, our CDO. The senior team will be available for Q&A. Starting this quarter, we moved up our earnings call cadence by almost a full week, made possible by the strong systems we've put in place and our streamlined processes. Over the course of the calendar year, this gives the team an extra three to four weeks to focus on value-add real estate activities. After a strong fourth quarter to close out last year, 2023 is off to a solid start despite the market backdrop. We affirmed full-year FFO guidance and increased full-year AFFO guidance, which puts our payout ratio in the 80% range. Same-store growth was strong in each business segment, blending to 5.5% for the quarter, and our balance sheet is in great shape with 5.4 times leverage. Outpatient medical continues to produce best-in-sector growth, despite ever more challenging comps driven by the quality of the portfolio and platform. CCRCs are performing strongly on a cash basis in particular, with entry fee receipts at an all-time high for the first quarter. I want to make a few comments on life science. For the past 20 years, I've invested in and asset managed nearly every variation of healthcare real estate. I've seen firsthand the pluses and minuses of each and believe life science falls on the favorable end of the continuum. I say that based on secular demand, the impact of innovation, barriers to entry in core submarkets, competitive advantage of incumbents, high operating margins, and net cash flow growth over time. It's a business driven by the aging population and the desire for improved health, two things that aren't going away. At the same time, we fully acknowledge that any business runs in cycles. In fact, despite the market exuberance the past few years, we correctly underwrote the growth with slow, and we position ourselves accordingly. No new development starts in the past 18 months, no material operating acquisitions in more than 24 months, very few lease maturities this year or next due to proactive early renewals, and we didn't compromise on asset quality during the boom. The reality is that not every drug candidate will succeed, and biotechs don't raise 10 years of cash up front. It's a given that some companies won't make it, and none of this is a surprise to us. We build our portfolio around these realities. For example, one aspect of our cluster strategy is that growing tenants in our portfolio can take space when another tenant contracts, whether through a direct lease or a sublease. It's often done proactively, powered by our robust asset management. Scott Bowen will share recent examples. For several reasons, we see the pullback in sentiment as a huge opportunity for current and potential HealthPeak shareholders. One, we have a relatively small amount of near-term lease role, and when we do have availability, we continue to sign leases. New development starts will be very low across the sector for the foreseeable future. Three, higher borrowing costs and delayed lease up will create acquisition opportunities in the coming years. And four, we have a big land bank with strong progress on entitlements. When fundamentals turn, which they inevitably will, we expect to be in great shape to capitalize. Recall we were patient with our land at the cove and the shore until market conditions were right, then generated huge returns for shareholders. Perhaps goes without saying, but the best opportunities come out of downturns. Now a few Board of Director updates. First, congratulations to Kathy Sandstrom on being elected as our new chairperson. Kathy has been an independent member of our board since 2018 and brings a wealth of real estate, capital markets, and governance expertise. She was previously a senior executive at Heitman, an important public and private real estate investor. An enormous thank you to Brian Cartwright, for his five successful years as chairman while we dramatically improved the company and portfolio. Brian will remain an independent member of our board and a highly valued advisor to me personally. And I would like to formally welcome Jim Connor to our board. Jim has a strong track record of creating internal and external growth as CEO of Duke Realty, in addition to development and outpatient medical experience that will contribute to the execution of our strategic plan. Finally, we are pleased to report that we received the highest possible quality scores from ISS for the E, the S, and the G in our recent proxy statement. I'll turn it to Scott Bone for commentary on life science fundamentals.