Financial Data and Key Metrics Changes - For Q2 2022, the company reported FFO as adjusted of 0.44pershareandtotalportfoliosame−storegrowthof3.71.68 to 1.74pershare,withanincreaseinmedicalofficesame−storeguidanceby75basispointsto32 billion of liquidity [36] Business Line Data and Key Metrics Changes - Life science occupancy finished the quarter at 99%, with same-store growth at 4.3% and cash mark-to-market on renewals positive at 28% [15][35] - Medical office same-store NOI grew 4.5%, with leasing activity ahead of budget, signing 1.6 million square feet of leases year-to-date [26] - CCRC entry fee cash receipts were up 30% year-over-year, with RevPAR increasing by 6% [28] Market Data and Key Metrics Changes - In South San Francisco, market rents are estimated to be up low to mid-single digits year-to-date, with 2.5 million square feet of current demand [24] - Boston has the highest gross demand but also the highest new supply, with purpose-built new supply about 90% pre-leased [50] - San Diego rents are up low single digits, with active demand at 1.3 million feet [25] Company Strategy and Development Direction - The company announced a 500millionstockrepurchaseprogram,believingthecurrentsharepricedoesnotreflecttheinherentvalueofitsportfolios[13]−Anewlifesciencejointventurewasformedwithaleadingsovereignwealthfundforredevelopmentproperties,allowingthecompanytoacceleratedevelopment[11][12]−Thecompanyisfocusedonmaintainingastrongbalancesheetwhilepursuinggrowthopportunitiesinlifesciencesandmedicaloffices[99]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementnotedthatthedemandforscientificinnovationremainsstrongdespiteeconomiccycles,withbiotechcapitalraisingstilloccurringathealthylevels[24]−Theriskofnewsupplyhassignificantlydeclinedduetohigherdevelopmentcostsandinterestrates,makingnewstartsunattractiveforlevereddevelopers[22]−Managementexpressedconfidenceintheportfolio′sperformance,withcollectionsremainingat9926 million, recycling proceeds into a core acquisition [30] Q&A Session Summary Question: Focus on life science demand and market strength - Demand remains strong historically, with Boston having high demand but also high new supply, while San Diego and South San Francisco show similar trends [44][45] Question: Tenant health and funding for biotech companies - The watch list has not grown, with collections at 99% and several companies raising funds recently [55][56] Question: CCRC portfolio and its fit within the overall strategy - CCRCs represent about 10% of the company, providing high-quality cash flows with no new supply expected [60] Question: Guidance for entrance fees and impact of higher interest rates - Entry fee cash receipts were strong, and the company remains optimistic about ongoing demand despite potential housing market slowdowns [66] Question: Medical office portfolio and expense initiatives - The company is focusing on technology investments to lower utility expenses and has seen improvements in expense recovery rates [70][71] Question: Joint venture strategy and impact on leverage - The joint venture allows for shared funding and risk, with no impact on leverage as the company plans to fund buybacks through less core asset sales [99]
Physicians Realty Trust(DOC)2022-08-03 21:03