Health Care REIT Makes $650 Million of Investments in Q3, FFO Up 60%

Health Care REIT, Inc. (NYSE:HCN) reported a net income attributable to stockholders of $36.6 million, or $0.21 per share, for the quarter ended Sept. 30, 2011, a substantial improvement over last year’s loss of $4.6 million, or $0.04, in the third quarter.

Normalized funds from operations (FFO) went up nearly 60% to $150.4 million, or $0.89 per share, from 2010’s $99.4 million and $0.79 per share.

Rental income was up 73% in the quarter to nearly $250 million compared to the previous year, while property operating costs were five times more expensive than in the third quarter of 2010, at $103.9 million.


“Health Care REIT’s relationship investing strategy continues to generate significant opportunities, as demonstrated by nearly $650 million of investments completed during the third quarter of 2011. These high-quality investments are concentrated in private-pay seniors housing assets, such as our new investment with Chelsea Senior Living, as well as health system affiliated medical office buildings,” said George L. Chapman, Chairman, Chief Executive Officer and President of Health Care REIT, in a statement.

HCN’s assets were up 75% from $7.9 million in 2010 to $13.9 million. HCN completed $644 million of gross investments, including $569 million of acquisitions in the third quarter at a blended yield of 7.3%. The REIT made a $308 million acquisition and leaseback of 10 senior communities from Chelsea Senior Living.

Differences to HCN’s outlook include an increase in normalized FFO per share guidance, from $3.34 to $3.40 per diluted share, to a range of $3.38 to $3.43 per diluted share, representing an increase of 10-11% from 2010. This increase relative to prior guidance reflects the closing of nearly $650 million of gross investments in the third quarter, offset partially by higher dispositions.


The outlook for net income attributable to common stockholders has been lowered to a range of $0.99 to $1.04 per diluted share, from $1.04 to $1.10 per diluted share.

View Health Care REIT’s 3rd Quarter earnings report here.

Written by Alyssa Gerace