Health Care REIT Q1 Profits Soar 25% on Senior Housing Investments

Health Care REIT, Inc. (NYSE: HCN) today announced a net income of $71.8 million in the first quarter ended March 31, 2013, up 25% from $57.5 million reported one year previously. 

On a per-share basis, HCN earnings for the first quarter rose to $0.21 per diluted share, compared to $0.19 from the same period a year ago. 

HCN attributed much of its performance to expanding the company’s senior housing portfolio.


During the first quarter of 2013, HCN increased same-store cash NOI by 3.5%, including 5.6% growth in the senior housing operating portfolio. Additionally, the company increased its private pay mix to 82% during the quarter, up from 73% reported in the same quarter in 2012.

The company also saw revenues from resident fees and services more than double to $327.3 million in the quarter from one year ago. 

HCN also completed new investments of $2.6 billion during the quarter, including $2.4 billion related to the Sunrise Senior Living acquisition as well as two properties with Brookdale Senior Living for $53 million. 


HCN’s investment in Sunrise properties is currently $3.5 billion, and the company expects that investment to increase to $4.3 billion by July 2013 upon acquiring additional joint venture partner interests.

The $4.3 billion investment is expected to include 120 wholly owned properties and five joint venture properties, where HCN expects the acquisition to generate a 6.5% unlevered initial yield, or 6.1% after capital expenditures.

While HCN has affirmed its 2013 guidance to generate normalized FFO in a range of $3.70 to $3.80 per diluted share, the company has revised its outlook for net income attributable to common stockholders in a range of $0.70 to $0.80 per diluted share. 

“Our business model continues to generate strong same-store NOI growth and asset value appreciation,” commented George L. Chapman, chairman and CEO of Health Care REIT. “We remain confident our investment and capital allocation strategy will continue to generate attractive cash flow growth and total shareholder returns.”

Written by Jason Oliva

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