Healthpeak Properties (NYSE: PEAK) is in the process of trimming up to $4 billion worth of assets from its senior housing operating portfolio (SHOP) and triple-net senior housing segments. The real estate investment trust (REIT) also has moved its headquarters to Denver.
The company on Monday announced it has about $1.5 billion worth of assets across eight transactions under purchase agreements, and another approximately $2 billion under letters of intent across six different deals. That’s in addition to the 14 assets Healthpeak sold between July and November, representing about $100 million.
All told, the REIT is in various stages of progress on the sales of more than $4 billion of SHOP and triple-net transactions, according to its third-quarter 2020 earnings disclosure. Additionally, Healthpeak is marketing for sale the majority of its remaining SHOP and triple-net assets.
Monday’s announcement comes more than a month after Healthpeak CEO Tom Herzog indicated the REIT planned to trim its SHOP and triple-net senior housing segments, and just weeks after reports surfaced it was considering moving the company headquarters to a new city.
In addition to the effects of Covid-19, Herzog cited senior housing challenges such as more intense competition from smaller developers and increased CapEx needs among Healthpeak’s communities, as well as the threat of increased federal regulation as a result of the industry accepting CARES Act stimulus money.
“I’m not saying it’s not going to be a good business long-term, because there will be a social need for it,” he said.
As of Sept. 30, the company had 62 properties in its triple-net portfolio, 128 in its SHOP segment and 17 continuing care retirement communities (CCRCs), according to its third-quarter supplemental document. The properties account for more than a quarter of Healthpeak’s portfolio income.
Average occupancy for the company’s SHOP segment declined by 10 basis between September and October, and move-ins fell 17% between those months, according to Healthpeak. Meanwhile, the company collected 97% of its triple-net rent in the third quarter of 2020, with the remaining 3% deferred to Capital Senior Living (NYSE: CSU).
Healthpeak also shared it had established a new corporate headquarters in Denver, Colorado. The new location is more centrally located than its previous HQ in Irvine, California, the REIT noted in its earnings announcement. The company will maintain an office in Irvine and one in Franklin, Tennessee.